Tag Archives: alcohol

Diageo acquires premium cold brew coffee liqueur, Mr Black

Diageo recently announced that it has acquired Mr Black, the Australian premium cold brew coffee liqueur. Mr Black was launched in 2013, by designer Tom Baker and award-winning distiller, Philip Moore, with the vision of bringing the global coffee culture to the world of spirits and cocktails. Mr Black has grown to become the leading premium-priced coffee liqueur in the United States, applying modern coffee brewing techniques and quality sourcing to reinvigorate coffee cocktail culture and consumers’ desire for premium coffee cocktails, such as the espresso martini and coffee old fashioned.

Over the last five years, Mr Black has been the fastest growing brand in the global coffee liqueur category. Now available in 22 countries, the brand appeals to craft cocktail lovers and consumers seeking delicious tasting cocktails in bars and restaurants, and for indulgent, at-home occasions. Mr Black sources and roasts coffee to its own bespoke specification, creating the premium liqueur with a delicious and rich coffee taste.

In 2015, Diageo acquired a minority stake in Mr Black through Distill Ventures, the Diageo-backed accelerator programme. Distill Ventures receives funding from Diageo and works with the company to support entrepreneurs as they launch and grow innovative drinks brands.

Co-founder, Tom Baker, will remain actively involved with the brand, working with the Diageo team to build on Mr Black’s success.

Claudia Schubert, President, U.S. Spirits and Canada, Diageo said, “With its award-winning liquid, eye-catching design and packaging, and ability to thrive in culture, we believe Mr Black is just getting started in the dynamic coffee liqueur segment. This acquisition is in line with our strategy to acquire high growth brands in exciting categories, and we are delighted to welcome Mr Black into our portfolio.”

Tom Baker, Co-founder of Mr Black said, “Coffee is more than just a drink – it’s a culture, ritual, obsession, aesthetic, experience, tradition and a community.

KALS launches Foster’s nationally post Acquisition

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As a company KALS has been growing organically and inorganically acquiring breweries and distilleries along the way. With the acquisition of Foster’s in India, the company has added a new dimension to its growth plans. A report.

KALS is looking to brew a new vision in the Indian beer industry with its acquisition of Foster’s Beer and three breweries from ABI, which include the East Coast Brewery in Odisha, SICA in Pondicherry and Malabar in Kerala, all formerly SAB breweries. The company has acquired a package deal from ABI which includes three breweries, Kerala, Pondicherry and Odisha along with the Foster’s brand.

The brand has been purchased on an outright ownership basis for India, in other words, KALS now owns Foster’s, it’s variants and all IP related properties for the territory of India. The acquisition fits very well into KALS premium growth vision and they believe that the brand is vibrant with high consumer brand recall.

Not long ago Foster’s was a Pan India brand that was well accepted and this belief has been reaffirmed by the consumers and market since its relaunch few weeks ago. KALS has also acquired a brewery in Rajasthan, formerly Mount Shivalik, with brand rights of Thunderbolt, Golden Peacock amongst others for the state of Rajasthan.

All these acquisitions have given KALS a combined brewing capacity of 3 Million HL, putting KALS as the largest standalone Indian brewer in the market.

Foster’s, the famous Australian beer, is an internationally-distributed brand of lager. It is owned by the international brewing group Asahi Group Holdings, and is brewed under licence in a number of countries, including its biggest market, the UK, where the European rights to the brand are owned by Heineken International.

KALS is in the process of rolling out Foster’s Nationally and as part of the process, the brand has been launched in Pondicherry, Odisha, Uttar Pradesh and Karnataka with plans to roll out in the other markets in the next few weeks.

In last 24 months KALS has created a solid foundation, especially in creating brewing capabilities across the country with five breweries located strategically making them the largest, stand-alone Indian brewing company.

According to spokesperson of the KALS group, the promotional strategy is currently a work in progress, and we are getting ready for the oncoming season. Plans are also afoot to launch a vodka brand which is a new segment for KALS.

KALS Distilleries and KALS Breweries was launched in one of the most backward districts of Tamil Nadu in the year 2010 and 2013 successively. Both these manufacturing units have become one of the largest players of alcoholic beverages to TASMAC, a Government run wholesale-cum-retail undertaking in Tamil Nadu. The products of KALS Distilleries and KALS Breweries have already made their imprints in the

States of Kerala and Puducherry and Karnataka.

KALS Breweries, a state-of-the-art and automated plant with its own dedicated system software, was set up with German know-how. It has also entered into a tie-up with VLB, Berlin for talent infusion and development of brewing. KALS also has exclusive manufacturing facility to produce canned beer is already installed and the products are being sent to Kerala, Puducherry and other states.

The Management of the KALS Group of Companies are particular about ensuring compliance with high standards of quality keeping the consumer preference in focus. Legal compliances are given top priority. KALS Distilleries and KALS Breweries are the first alcoholic beverage manufactories in Tamil Nadu to obtain clearance from the statutory Site Approval Committee.

This drive towards ensuring quality and satisfaction of consumer preference enabled IMFS and beer products of KALS to record the second largest sales in Tamil Nadu. KALS Group of Companies occupy the top few sales in terms of performance of alcoholic beverage products in Tamil Nadu all through the year. La Martine VSOP Premium Brandy and 1848 Premium XO Brandy are the premium segment products highly cherished and sought-after by consumers in Tamil Nadu. Kolt Extra Strong Beer, Black Pearl Triple Super Strong Beer and Sterren 7 Premium Quality Lager Beer are among the most popular beer products in Tamil Nadu. Both KALS Distilleries and KALS Breweries have a wide range of products serving all sections of society.

UK wants to say Cheers with Scotch despite tariffs

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In a recent visit to India, UK Ex-Prime Minister Boris Johnson decided to push for a Free Trade Agreement. The idea was to have fewer trade barriers between the two countries. In other words, an agreement that would help both countries ship products and services without excessive taxes.

For the UK Scotch whisky is the elixir perhaps because of Brexit. UK voted to leave the European Union and perhaps what went unnoticed was third of the country’s whisky exports - £1.3 billion ($1.65 billion) worth actually, went to EU countries. Post-Brexit however, that isn’t the case. The move has cost the scotch whiskey industry £5 million ($6.3 million) every week. And now they’re being forced to work with every EU country independently. They have to deal with different shipping norms, separate customs requirements and a whole host of packaging regulations.

It turns out that all these issues have prompted the UK to think differently and find newer markets. First, they targetted Australia and struck a deal — to remove a 5% tariff on scotch whisky. Elsewhere the UK managed to obtain the coveted “protected status” for its whisky by inking separate deals with Japan, Norway, Iceland and Liechtenstein. This will protect their scotch whisky from imitation, misuse, or any other forms of intellectual abuse.

And the focus shifted to India, a country that consumes more whiskey than any other country in the world. One in every two bottles of whiskey is now sold in India and the UK wants to make up for the loss in sales in the European Union by growing its market in India.

The UK allows ALL imports of Alcoholic Beverages into the country to be taxed to NIL customs duty and this is not just from India, it’s from 70+ other countries, that supply AlcoBev to the UK. Similarly, the conditions about a minimum three-year maturity, type of substrate used, the absence of additives, etc. are all equally applicable to Whiskies from all supplying countries, including the UK. So, there are no India-specific barriers that some players are seeking removal of. On the other hand, India imposes customs duty of 150% on all imports of Alcoholic Spirits, from all countries including the UK (which has the largest share of such imports), says I P Suresh Menon, Secretary General, ISWAI (International Spirits and Wine Association of India).

But the whiskey definitely dominates the Indian market, almost contributing 60% of sales to the IMFL (Indian Made Foreign Liquor) segment. But if you’re a person who enjoys a glass every now and then, you’d know there’s a difference between Indian whiskey and Scotch whisky.

Scotch whiskey is typically of Scottish origin and made from grains - primarily barley. On the other hand, IMFL is made from molasses, a by-product of sugar production and grains. It is much cheaper. So in some ways, IMFL liquor outsells its foreign counterpart in a massive way. But there’s another roadblock for foreign manufacturers - Taxes! See, taxing liquor is a wonderful source of revenue for the Indian government. For instance, five southern states namely Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala generate 10% of their revenues from taxes on liquor sales alone. And you can see why they want to impose even higher taxes on imported liquor. In fact, import duties can go as high as 150% in some cases. And that means, even though Scotch Whisky imports in the country have risen 200% in the past decade, it still only commands a tiny 2% market share in the Indian markets.

Now imagine if the tariffs were removed completely. What would that mean for the UK and Scotch Whisky industry. Well market sources contend that the market share could reach as high as 6%.

And so you can see why this makes total sense for whiskey manufacturers in the UK. But do Indians benefit in any way?

Well, for starters Scotch Whisky will likely become more affordable and more Indian whisky producers will use more Scotch in their IMFL and will premiumise their brands to an extent that the difference between Scotch and IMFL would not be much different. So it will mean that Indian consumers will get a product as good as Scotch at a favourable price. But cutting importing duties could also bump up revenues for the government. For instance, last year, the Maharashtra government slashed excise duty by 50% on imported liquor. And it now expects revenue to rise by ₹150 crores — from the sale of imported scotch annually.

And finally, with over 19 million new consumers coming of “legal drinking age” each year, India is definitely a market that liquor makers would like to tap into. Guess it will be a win-win situation for consumers. The Indian government may be tempted to go ahead with deal as the possibility of revenues rising in a sustainable manner is a good possibility.

According to Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC apex body for domestic liquor firms), Vinod Giri, this FTA also holds significant importance for India in the scope of future trade with the United Kingdom as trade competitors like Bangladesh, Sri Lanka, and Pakistan enjoy duty-free merits under the UK’s generalised scheme of preferences. Indian liquor producers are keen to enjoy newer markets for their products in the United Kingdom but are hindered by the stipulation that whiskey exported to the Brits should be Grain based and aged for three years. At the same time, liquor produced in India is not aged.

Refined Oil (9.7% of all UK goods imported from India)
Clothing (9.6%)
Medical and pharmaceutical Products (5.6 %)
Miscellaneous Metal Manufactures (5.1%)
Textile Fabrics (5.0%)

All these products were the primary imports to India from the United Kingdom, but as the pact stands on the brink of either collapse or being executed after several reconsiderations. A recent list had brought forward 240 odd items which would face trade duty deductions once the agreement is executed. From this pool of 240 things, a few that stand out are whisky, cars, vaccines, basmati rice, wool, and tea premix. As of now, no indication has been released about the possible way out of the situation, but in the coming future, it’s possible that the pact might be passed with several reconsiderations and follow-up procedures. Currently, diplomatic negotiations of the highest level are going on between the countries.

Amid reports of the UK seeking massive tariff concessions on imports of scotch whiskey during ongoing free trade agreement (FTA) negotiations, liquor sector association Confederation of Indian Alcoholic Beverage Companies (CIABC) has written to the government strongly objecting to any plans to slash Basic Customs Duty (BCD).

A reduction in BCD, it said, will adversely affect Indian Made Foreign Liquor (IMFL) brands since imports already dominate the Indian alcoholic beverages market. CIABC has been part of several recent meetings hosted by the Ministry of Commerce with stakeholders before the trade talks with the UK.

“India exports just ₹5 crore worth of alcoholic beverages annually to the UK against an import of ₹1,300 crores. Exports to the UK constitute only 0.2% of India’s total exports of alcoholic beverages whereas imports from the UK are 24% of India’s total import of alcoholic beverages,” said Vinod Giri, DG, CIABC.

Giri further noted that “restrictive” trade policies are also hampering the growth of Indian exports. “While the export of alcoholic beverages from India stood at 7.3 million cases (9 litre each) in the year 2019-20, exports to the entire EU (including the UK) were less than 30,000 cases which consisted of Indian super premium malt whiskies,” he pointed out.

CIABC said that the United Kingdom should also remove restrictions such as a minimum three years’ maturation period for whiskey and rum, since it has been scientifically established that in warm Indian conditions, spirit ages 3-3.5 times faster than in the UK. Giri added that a BCD cut would skew the balance of trade.

A notion worth dispelling is that Scotch whiskies are costlier to produce; it is 50% more expensive to produce it in India than in Scotland.

In wake of the Indo-UK trade discussions, many ‘experts’ argue for reduction in tariff, particularly slashing custom tariffs on imported Scotch and on ‘Intermediate’ products which they say are nothing but high-strength, potable, undenatured ethyl alcohol used for bottling and blending in India.

They argue on three main grounds. One, that India has a large trade surplus in the category and can afford greater imports; two, customs duty reduction on intermediate products will encourage ‘Make in India’; and three, even if tariff is reduced the bulk of consumption will remain locally produced whiskies — so why bother.

This industry contributes nearly ₹250,000 crore in taxes and for most states it constitutes 15-30% of revenue. Customs duty is not even ₹5000 crore in comparison. Second, this industry uses agricultural products as primary raw material and nearly 50 lakh farmers depend on it. It provides employment to 20 lakh people. Any disruption will have widespread ramifications for the government, farmers and labour market.

The problem with the first argument is that it hides the true balance of trade on alcoholic beverages using a wider head of ‘Food and Drinks’. If one separates alcoholic beverages/products for human consumption from the wider clubbing of ‘Food and Drinks’, a very different picture emerges.

As per DGFT data for 2018-19, India exports only ₹5 crore worth of alcoholic products/beverages to the UK, against import of ₹1300 crore. Clubbing alcohol under a much bigger ‘Food & Drink’ category to claim favourable balance of trade is highly misleading.

The second argument is also a misconception. Scotch Whisky goes through two major stages of productions — distillation and bottling. The ‘Intermediate’ Scotch whisky is actually the output of the first stage, it has been produced and matured in Scotland. What happens in India is only bottling. Therefore, while incentivising intermediate products through reduced or zero duty will lead to an increase of usage of bottling plants in India, which will be a big loss for Indian farmers and manufacturers.

The third argument misses out on three vital points. One, in product categories with multiple price segments like whisky, consumers seamlessly shift to the next category up or down depending on affordability.

So, when a Scotch whisky is sold at a lower price it takes away consumers from products in the price segment, starting a domino effect that makes the domestic industry the net loser. Two, introduction of Scotch whisky at lower price attacks the profit driving end of portfolio of Indian companies, thus jeopardising their viability. Third, Indian premium whiskies like Amrut, Paul John or Rampur are now regarded amongst the best in the world but are unable to make the same headway in the domestic market due to an unsupportive regime and reducing customs duty further just will not help.

Another notion worth dispelling is that Scotch whiskies are costlier to produce. Rather, it costs at least 50% more to produce a whisky of similar quality in India than in Scotland. This is primarily on account of a higher cost of capital and higher taxes in India, interstate restrictions and higher evaporation losses.

Also, many states offer concessionary taxes on imported products, but reduction in customs tariffs cannot be done without removing compensatory state-based concessions as otherwise it will create a hugely discriminatory tax regime against Indian products.

If we talk about reciprocal duty concessions, the problem is that barriers put up by the UK are not tariff based but non-tariff ones. India, being a sugar producing country, has evolved whisky recipes based on spirit distilled from molasses. The UK does not accept this as it is not “recipe standards”. The result of these non-tariff barriers is that of the 70 lakh cases of whisky exported from India every year, the whole of the EU including the UK accounts for less than 30,000!

Indian industry is not against reducing customs duty on alcohol, but it should be in a phased manner and up to a point where it creates a level playing field.

Accordingly, it has put forward its recommendation to reduce import taxes, aggregate of customs duty and AIDC, from 150% to 100% now and to 75% in five years’ time. It has also recommended a threshold import price for taxation at $5 per bottle, and reciprocal concessions from the UK allowing whiskies from India to be allowed in the UK market as ‘Indian Whisky’ without minimum maturity conditions.

Anheuser-Busch InBev launches Budweiser Magnum whiskey in India

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For a numero uno beer brand to become a whisky brand is step in the right direction especially if the country is India which is a whisky drinking country.

The world over, whiskey has been seeing a renaissance. Bourbons, Scotch, craft distillations are all riding a wave of popularity among millennials. There has never been a better time to be a whiskey lover. The brown liquor is now more popular, more diverse and, most importantly, more delicious than ever.

The Indian alcohol market has been dominated by darker liquids, with 72% of total spirits’ consumption in the country being whiskey. According to the research report – ‘India Whisky Market Outlook, 2027-28’ – India consumed 237.22 million cases of whiskey in 2021 and the consumption is to reach 289.49 million cases by 2027-28, which would generate revenue of over ₹287000 crores.

In a first, brewing company Anheuser-Busch InBev or AB InBev, which has a diverse portfolio of global beer brands, including Budweiser, Corona, Hoegaarden, Stella Artois, among others, entered the spirits market in India with the launch of blended American whiskey under its brand Magnum Double Barrel in select markets. The move is part of the company’s Beyond Beer portfolio. It also is in line with its strategy to tap the trend towards premiumisation in the alcoholic beverages market in the country, while keeping consumer centricity at the core.

Artfully curated for the Indian palate but distinctively global in manufacturing craftsmanship, Magnum Double Barrel whiskey is a combination of American corn whiskey aged in white oak barrels in Kentucky and the finest of Indian single malts aged in ex-Bourbon casks, in Goa. The company is sourcing and blending Magnum Double Barrel whiskey in partnership with Sazerac and their Indian subsidiary JDPL; which has resulted in a blend of signature flavours that are silky soft with a malty and complex, creamy finish.

Commenting on the Beyond Beer portfolio and product launch, Vineet Sharma, Vice President Marketing – South Asia, AB InBev said, “Beyond being the 2nd largest spirits’ market in the world (10% of global spirits consumption) and the biggest whiskey market by volume / consumption — India also enjoys the benefits of favourable demographics, trends complimentary to premiumisation, a positive outlook on ease of doing business (EODB), and policy. We see a huge opportunity for premium offerings across the beverage category, in line with our overall premiumisation strategy. For Indian consumers, the attitude towards premiumisation is category agnostic making the country a lucrative ground for innovations across price points and categories. As a consumer-first organisation, we are actively listening to our patrons and tracking trends, behaviours and the launch of American blended whiskey — Magnum Double Barrel — is an effort to energise, reinvigorate the category, adding much-needed newness, fereshness to it. It is a true homage to the collaboration and exchange between continents, countries and cultures. The unique concoction of American corn whiskey with the finest Indian single malt is a first for the Indian audience.”

For most Indian drinkers, whiskey is an aspirational drink and the elemental choice. Widespread up-trading was evident pre-pandemic; 2021 has seen the trend accelerate significantly. As the second-largest importer of Scotch after France, India has the necessary expertise and skill to distil superior quality, globally admired, critically acclaimed liquids and ready audience in the country’s LDA (legal drinking age) + millennial consumers with disposable income that allows them to experiment. Thus, it’s a lucrative market to tap.

Taking us through their distribution strategy, Sharma said, “India is now amongst the top five markets for Budweiser globally and holds steadfast in its position as the country’s fastest growing premium brand. Over the last few years, we have gone from strength-to-strength and have an established distribution network across the nation. At present, Magnum Double Barrel will be available at select alcohol retail outlets, premium pubs, bars and leading restaurants. The plan is to listen, learn and expand.”

The company has already introduced the product in leading alcohol retail outlets in Maharashtra at ₹2,800, Goa at ₹1,800 for a 750ml bottle, and soon will be available in Karnataka, Haryana, West Bengal, Uttar Pradesh, and Punjab.

Further revealing the plans to promote the brand, Sharma informed that Magnum Double Barrel’s launch campaign — Make New Happen — delivers on the spirit of innovation and originality. “The objective of the campaign is to liberate whiskey by creatively tapping the cultural nerve of consumers who are rewriting the rules of its consumption and breaking perceptions around it. The communication caters to the ever-evolving, diverse tastes and preferences of consumers above legal drinking age who emphasise savouring their drinks by experimenting with flavours and discovering premium alternatives to classic blends. We also have long-standing relationships with music festivals, events, and allied partners, and we will be sampling across to get feedback from consumers. We really want the unique blend to take center stage and let the product speak for itself. We will continue to spotlight people, places, and passions by expertly crafting experiences for contemporary India,” he added.

Air India Pee Gate, Review of in-flight Alcohol Service

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The horrific incident of an inebriated passenger urinating on a fellow passenger in an Air India flight from New York to Delhi recently has shaken the world. The drunken passenger – Shankar Mishra – has been arrested, albeit after enormous media pressure, and the airline has been pulled up by the Directorate General of Civil Aviation (DGCA). Air India’s apology for not handling the incident properly and for being insensitive to the woman passenger, came a bit late and with the Air India Chief Executive Officer, Campbell Wilson adding that it would review the ‘policy on service of alcohol in flight’.

This was not just one incident. On December 6, 2022 on a Paris-New Delhi flight, a drunk passenger was caught smoking in the lavatory, ignoring the crew’s admonition. And another passenger allegedly relieved himself on a vacant seat and blanked of a fellow female passenger when she had gone to the lavatory. Disgusting, to say the least.

IATA says offenses often go unpunished

The International Air Transport Association (IATA) has said that there is growing concern from airlines, governments and passengers at the increasing frequency and severity of these incidents that involve violence against crew and other passengers, harassment and failure to comply with safety and public health instructions. Committed by a minority of passengers, unruly incidents have a disproportionate impact, threatening safety, disrupting other passengers and crew and causing delays and diversions. However, due to loopholes in existing international air law, such offenses often go unpunished.

One Too Many

IATA is also working with airports, duty-free retailers and other groups to ensure the responsible sales and marketing of alcohol to avoid unruly passenger incidents resulting from intoxication. In addition, IATA is participating in public awareness campaigns that encourage responsible consumption of alcohol before traveling by air such as the Fly Safely, Drink Responsibly in Norway and the One Too Many in the UK, IATA is also working with partners to highlight the types of prohibited conduct onboard flights and is supporting the #notonmyflight campaign launched by the European Union Aviation Safety Agency (EASA).

27% alcohol use, 24% smoking violations

IATA said that incidents involving unruly behaviour in airlines are on the rise. Alcohol use is involved in 27% of these cases while 24% cases related to noncompliance with smoking regulations. IATA said the solution seems obvious. “If too many airline passengers are abusing alcohol and acting violently, airlines can limit alcohol sale to solve the problem. However, airlines are looking for a regulatory fix, showing their reluctance to lose the alcohol sales profit despite the harm alcohol is causing.

IATA said that passengers using alcohol as an excuse to create havoc in airplanes is rising. To find a solution, several agencies which oversee in-flight regulations are working with commercial airlines. They are reviewing the current alcohol sale and consumption practices in airport bars as well as in-flight.

In the US, federal law prohibits flight crews from allowing “obviously intoxicated passengers” to board aircraft, and it doesn’t allow flight attendants to serve alcohol to anyone who appear intoxicated. Another regulation prohibits passengers from “assaulting or intimidating” crew members and interfering with their duties. Doing so carries a fine of up to $35,000 and a prison sentence of up to 20 years.

No liquor on domestic Indian flights

On Indian domestic flights, no alcohol is served, but on international flights airlines do. This rule was implemented in 1994 after the Ministry of Civil Aviation received several complaints of flyers getting inebriated and misbehaving with the airline staff and other passengers.

Presently, Air India has a policy on serving liquor on international flights as per which a passenger can’t be served more than two drinks on a flight that is less than four hours. However, the amount of alcohol served differs from business, first and economy classes with the last mentioned just getting one drink, whereas getting more, but not unlimited.

IndiGo which also operates on international routes serves alcohol on these routes and passengers can purchase on-board. However, consumption of liquor bought from Duty Free shops is prohibited on board.

Many airlines don’t serve alcohol

These are some of the airlines which do not serve liquor on flights – Air Arabia; Egyptair; Iran Air; Iraqi Airways, Kuwait Airways; Pakistan International Airlines,; Royal Brunei Airlines; and Saudia. Not all Middle Eastern airlines prohibit sale and consumption and the best example of service is Emirates Airline which has a lounge on board with the most exotic cocktails to be had at 40,000 feet.

One black sheep such as Shankar Mishra can mess up the entire inflight experience. Stricter punishments may be deterrent. Nevertheless, it is for the cabin crew to be trained, first in serving alcohol to passengers and secondly on dealing with unruly passengers, irrespective of whether the passenger is inebriated or not.

AA says growing number of disturbing incidents

While the nation was aghast with such appalling incidents, Alcoholics Anonymous (AA), India reacted by saying it was not an uncommon incident. In a report which appeared in the Times of India, a frequent flyer and member of AA said “As soon as we heard of the in-flight incident, we thought he is one of us! This is something we have all done, either mistaking our puja rooms, bedrooms, balconies or neighbour’s doorstep for the lavatory. Our mothers, wives and sisters have cleaned up after us.”

AA explained “Just three-four pegs at lunch will not do much harm to a habitually hard drinker. It is possible that he availed of the free alcohol in the lounge as well,” the spokesperson said. AA does not resent airlines offering free or unlimited liquor though, by its same non-judgemental code.

The AA spokesperson explaining the possible scenario behind the November 26 mishap said, “It is possible the passenger was so sozzled he got up from his seat only at the last moment to relieve himself, was wobbly due to cabin pressure, already disoriented by too much drink. He may have failed to judge the distance to the washroom and committed the offence owing to a combination of these factors. But by no means do we defend him or condone the act”.

Dubai slashes 30% tax on Alcohol

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What that means to an Indian Tourist or International Traveler?

In a landmark announcement, starting 1st January 2023 Dubai has scrapped their 30% municipality tax on all alcoholic beverages as well as the personal liquor licence fee. This means that alcohol will now be free-to-obtain for those eligible to legally purchase alcoholic beverages in Dubai.

A valid Emirates ID, or Passport for tourists, will still be required to apply for the same. But the reason why this is an important development, especially for travellers that flock Dubai from India, they can now enjoy buying alcohol at reduced rates at restaurants and also off the counter using their passports.

Most travellers from India or elsewhere aren’t always aware that they can buy alcohol from designated retailers or wine shops (as Indians know it) in Dubai using their passports if they are off legal age. And due to this lack of awareness, most travellers often leads for them to consume alcohol at restaurants, hotel bars, etc which often charge mark up of 4-5 times on alcohol.

Such instances were recently also observed during the FIFA World Cup as well when global tourists visited Dubai due to its close proximity to Qatar. But it is also obvious that Dubai is not only looking to make things easier for expats working in the country but also looking to become an even more attractive country for professionals and tourists for the future, especially with its Emirati neighbours like Saudi, Qatar, etc becoming more aggressive to attract professionals and tourists.

What is also important to note is that this ruling is currently being implemented on a trial basis for a period of one year with further decisions to make it permanent to be taken later.

Will alcohol be cheaper in restaurants and duty free though?

Although the taxes have been reduced, experts are unsure whether this tax break will be passed onto the consumer or not, especially in restaurants.

Tourists also expecting for the prices to reduce further at duty free will have to wait since there isn’t any clarity if this reduction on tax will prompt manufacturers to drive the prices lower further. If you thought that this tax break will make alcohol cheaper in duty free as well – then no – the liquor supplied in duty free is already without the taxes which means it will still continue to be at similar prices, although there are subsequent drivers that do allow distributors to drop prices further.

So if you are planning to visit Dubai in 2023 and enjoy the tipple, then things got more interesting for you.

Pent up demand in Global Duty Free markets, but there is caution

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The global duty free retail market size was valued at USD 35.87 billion in 2021. The market is projected to grow to 72.23 billion by 2029, exhibiting a CAGR of 9.17% during the forecast period. The global Covid -19 pandemic saw the Duty Free Retail experiencing lower-than-anticipated demand across all regions compared to pre-pandemic market exhibited a decline of 42.38% in 2020 as compared to 2019.

This market generates significant revenue for airports, airlines, tourism, and other travel-related industries worldwide. Total income from duty free and travel retailing. Duty free goods’ sales typically happen within international zones, and these goods can also be sold on ships or onboard aircraft with shoppers/travelers in transit.

The duty free retailing market is majorly driven by increasing growth of travel and tourism industry coupled with rising penetration of low cost airlines. Increasing sales alcohol and confectionery is a major factor driving the growth of the global market.

Travel retail revenues make a functionally important influence to the overall financing of airports, the maritime companies as well as their infrastructure. All in all, these physiognomies of duty free retailing pose distinctive offerings for the travelers by meeting their needs, generating revenues and in turn supporting the maritime and aviation transport infrastructure and their services. Duty free retailing has emerged in parallel with the expansion of sea and air travel.

Although, the use of perfumes and cosmetics has a long history, increasing demand for premium fragrances and cosmetic products has raised the growth of the global duty free retailing industry. Rising investments by the governments of several economies to set up duty free retailing centres to cater to international tourists is another key factor driving the global market. Perfumes and cosmetics as well as tobacco goods are expected to register the fastest growth over the forecast period owing to increased demand for international tobacco and cosmetic products. Travellers prefer tasting tobacco and other products of different countries and prefer purchasing them from duty free retailing shops. This is expected to drive the overall market growth.

According to the research, in 2021-22 lower prices vs the domestic market and value for money are consistently quoted across all segments, whether age groups, genders or travel purposes. Good value for money is a particularly significant purchase driver for seniors at 49% and millennials, 34%.

Convenience is also an important purchase driver for both seniors, 36%, Gen Z shoppers and leisure travellers (both at 23%). Another common purchase driver in travel retail in 2021-22 is loyalty to the brand, especially for seniors (30%) and females (26%).

Travel retail revenues make a functionally important influence to the overall financing of airports, the maritime companies as well as their infrastructure. All in all, these physiognomies of duty free retailing pose distinctive offerings for the travellers by meeting their needs, generating revenues and in turn supporting the maritime and aviation transport infrastructure and their services. Duty free retailing has emerged in parallel with the expansion of sea and air travel.

The research also analyses the importance of sales staff in influencing shopper behaviour. Sales associates have a significant impact on the decision to purchase and this varies quite considerably by customer segment as well as by region. The research reveals that the impact of the interaction has increased considerably in the wake of the pandemic as travellers set to the skies again.

Recent years have witnessed considerable demand for duty free alcohol across countries, notably in Asia. The diversifying consumer buying habits, rapidly increasing international tourist arrivals, and rising spending among the rising demand for premium liquor is creating heightened consumer interest in duty free alcohol worldwide at a macro. The alcohol category has also witnessed significant developments, most notably product launches, in recent years. At a macro level, the growing demand for retail will boost duty free alcohol sales and other product types during the forecast period. Furthermore, the alcohol category is likely to encourage market key players to offer luxury and premium products.

The proliferation and introduction of new international airports across countries are creating lucrative business opportunities, in February 2021, the Airport Authority of India (AAI), an Indian governmental body that operates 125 airports saw revenues of USD 135.07 million (`987 crore) for the first phase of an international airport named ‘Dholera’ in Gujarat. According to Civil Aviation Ministry’s ‘Indian Aviation’s Vision 2040 claims that by 2040, India will have 190-200 operational international airports, while the top 31 Indian cities will have two operating airports. The fleet of 622 airliners to more than double to 2,359 aircraft by March 2040.

Numerous airlines across countries are expanding their international networks and establishing new airports as post the Covid-19 crisis.

Duty free markets are sensitive to exchange rates among countries. Although they operate in several countries with currencies including Euros, Dollars, and Pound, which have specific exchange rates, they are subject to global market changes exchange rate of a particular day. The currency exchange fluctuations in the global market may positively or negatively including retail chains that offer luxury goods, depending on the fluctuating exchange rate.

Based on type, the global market is segmented into perfumes, cosmetics, alcohol, cigarettes, and others. Internationally reputed distribution channels offer luxury perfumes worldwide. Affluent global travellers typically visit duty free retail chains that offer perfumes of internationally reputed Gucci, Giorgio Armani, Al Haramain Dazzle Intense, Belle, Signature Rose, Signature Silver, and Khulasat Al Oud. Perfume types, including Perfume or De Perfume, Eau De Perfume (EDP), Eau De Toilette (EDT), and Eau De Cologne.

Based on sales channel, airports, onboard aircraft, seaports, train stations, and others constitute the market segment worldwide. The mushrooming number of domestic and international airports across countries is favouring products. Various developments within the ‘airports’ category highlight the increasing number of duty free stores across airports in 2022, Flemingo, a Dubai-based global travel retail operator, and Adani Group, an Indian integrated business establish a duty free shop at the Thiruvananthapuram International Airport by mid-May 2022. This strategic move intensifying competition in the Indian market.

As the duty free & travel retail industry had hoped, 2022 has so far brought real signs of hope that the recovery in international travel is under way. The pent-up demand for travel, so often alluded to during the darkest days of the pandemic, is evident in all markets. But that demand is putting severe pressure on airport and airline capacity. And the reopening of some countries, notably in Asia, is only taking place at a gradual, even glacial, pace.

The duty free and travel retail market was hit hard in 2020 due to the sudden fall in tourism amid the Covid-19 pandemic. The tourism sector has already felt the negative impact of the pandemic on its performance much earlier. Globally, travel restrictions and measures started as early as January 2020. Domestic and international tourists limited their travel due to fear of contracting Covid-19, which reduced the number of domestic and international customers for this retail channel.

Duty-free and travel retail comprises a category in a growing list of ancillary offerings by airlines. For some low-cost and ultra-low-cost carriers, the growth in the scope and magnitude of ancillary revenues has become key to their operations, allowing them to offer lower ticket prices and stimulate the overall demand for air travel as a result. Furthermore, when compared to airport duty-free and travel retail, the duty free and travel retail sales generated by airlines are substantially smaller, both in magnitude and relative to the financial performance of the respective recipient.

Diageo India initiates removal of mono cartons of VAT 69, Black & White and Black Dog

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In line with its initiative Society 2030: Spirit of Progress and its 10-year ESG action plan, Diageo India will be initiating a phased removal of mono cartons from its popular Scotch brands in India VAT 69, Black & White and Black Dog. Although there isn’t a clear timeline on when this removal is expected to commence, it includes Diageo’s global effort to be zero-waste to landfill from its own operations and offices by 2030.

The move comes following the announcement in May this year for the removal of mono cartons from its scotch portfolio brands globally, which included brands like Johnnie Walker Black Label, Johnnie Walker Red Label, Buchanan’s Blended Scotch Whisky and Bell’s Original Blended Scotch Whisky.

Although there isn’t a timeline on when the phased removal in India will commence, in May Diageo had stated that the removal of these mono cartons will allow the company to assess the response from the consumer, which if successful will be expanded to other brands as well in 2023.

What will the customer response be to this announcement in India remains to be seen, especially since standing out in a shelf space in a country like India is important, due to its stringent marketing policies. It will also be interesting to see if this move will prompt other manufacturers to follow a similar path.

Currently there isn’t any update yet if there will be any changes made to the packaging (we will update the article periodically), considering mono cartons play an important role in branding and packaging of the product. Also whether the removal of mono cartons is expected to affect the product pricing, also remains to be seen. Since manufacturers spend a considerable cost towards packaging their products, the cost is often passed onto the consumer.

Diageo believes that the phased removal will engage consumers to participate, contribute and promote a progressive move to a sustainable future and will result in saving 10,000 tonnes of paper and reducing 7,000 tonnes of carbon emissions annually.

ABD launches ‘ICONiQ White Whisky’ in Metaverse

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Allied Blenders and Distillers (ABD), the domestic alcobev company, has launched of its new whisky “ICONiQ White” on the metaverse, before the offering becomes available in the market.

The brand has been launched first in ABD MetaBar – the organisation’s presence in the metaverse. The brand will subsequently be launched in the physical world in markets nationally.

ABD India forayed into the metaverse with ABD MetaBar, an immersive virtual reality space providing consumers and enthusiasts with a differentiated experience of product discovery. Optimised for both mobile and desktop usage, the MetaBar taps into the growing interest in the Metaverse especially the youth and their willingness to experiment with novel digital activations.

Shekhar Ramamurthy, Executive Deputy Chairman, ABD, said, “A core belief at ABD is to ‘Think Differently’. The launch of ICONiQ White in ABD MetaBar, ahead of its physical launch, gives consumers an opportunity to immerse with the brand before they experience it in stores. We believe this is the shape of things to come and ABD would like to lead that change.”

Bikram Basu, Chief Strategy and Marketing Officer, ABD, said, “ICONiQ White is a contemporary whisky for blend, packaging, and positioning. It will appeal to the young adult and plays in an affordable premium segment which has the largest pool of consumers today. We are here with something very special and here to win.”

Sohini Pani, Founder and Managing Director – River, said, “Crafting the communication mix for ‘ICONiQ White’ was a delightful experience. It all started with the name. ‘ICONiQ’ is bold and trendy, while ‘White’ is a surprising twist in the world of whisky. The visual space and the idea pitch the brand as a playful companion for fun-loving younger audiences. The icing on the cake was the opportunity for us to build ground-up the ABD MetaBar a few months ago and work towards the launch of Iconiq White on the platform.”

Beam Suntory unveils renewable energy-powered Jim Beam Expansion

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Beam Suntory will invest more than $400 million to expand production at its Booker Noe distillery in Boston, KY, which produces Jim Beam. This expansion will increase capacity by 50%, while reducing the distillery’s greenhouse gas emissions by the same percentage, through the use of anaerobic digestors that will produce renewable natural gas to power the facility.

Beam Suntory has entered into an agreement with 3 Rivers Energy Partners to build a facility across the street to convert spent stillage into biogas which will be treated to renewable natural gas standards and piped directly back to the Booker Noe facility. The digestors will also produce a high-quality, low-cost fertilizer, which will be made available to local farmers, thereby supporting sustainable and regenerative agricultural practices.

Upon project completion, which is expected in 2024, the Booker Noe distillery will be 65% powered by renewable natural gas, and 35% by fossil-based natural gas.

“We are committed to making a difference by investing in cleaner technologies and systems, and the expansion and significant reduction in greenhouse gas emissions from this project does just that with our biggest brand,” said Beam Suntory President and CEO Albert Baladi. “This expansion will help ensure we meet future demand for our iconic bourbon in a sustainable way that supports the environment and the local community that has helped build and support Jim Beam.”

In addition to capacity expansion, the investment includes land, warehouses, and 51 new local jobs. Further, this project allows the distillery to invest in high-efficiency gas boilers to make maximum use of renewable natural gas, use scrubbing technology to remove carbon dioxide from fermentation tanks, and following a purification process, facilitate the beneficial reuse of more than 100,000 metric tons of high-purity carbon dioxide annually.

“As consumers around the world continue to discover bourbon, we want Jim Beam and our commitment to sustainability to be part of that discovery,” said Carlo Coppola, Managing Director of the James B. Beam Distilling Co. “I’m so proud to be honouring our legacy as the First Family of Bourbon by leveraging this renewable energy to support our brand’s trajectory for the next 225 years.”

Beam Suntory invests more than $500 million every year to make bourbon in Kentucky. The company recently completed a $60 million transformation of the James B. Beam Distilling Co.’s homeplace in Clermont, KY, including a new and elevated visitor experience, inclusive of the full Beam family of brands like Knob Creek, Basil Hayden and Booker’s Bourbons, the Fred B. Noe Distillery, and the Kitchen Table restaurant.

“I want to once again thank the leadership at Beam Suntory for this commitment to grow the Booker Noe Distillery in Nelson County,” said Kentucky Governor Andy Beshear. “The dozens of jobs this project is creating will benefit so many families in Central Kentucky, and the company’s continued growth reflects the strength of our state’s signature bourbon industry. Congratulations to everyone involved with this significant investment. I could not be more excited to see what’s next for Jim Beam Brands in Kentucky.”

Beam Suntory’s investment was first announced by the state of Kentucky through a series of economic incentive grants, made in July, including the $400 million investment to increase capacity, build warehouses, and create new jobs.

“Our goal is to help Jim Beam create a sustainable future for their company and the planet,” said John Rivers, CEO of 3 Rivers Energy Partners. “With this process, we will create new renewable energy, and help sustain the agriculture needed to create their products. It is truly a full circle sustainability approach.”

3 Rivers Energy Partners specialises in the design, build, and operations of renewable natural gas projects. The company works to provide renewable energy solutions for organisations by utilising existing bio-waste streams as feedstock for renewable energy sources.

Beam Suntory has made ambitious commitments to protect the planet, consumers and communities through Proof Positive, the company’s long-term, enterprise-wide sustainability strategy. The company also issued its inaugural sustainability report recently.

As an energy developer, 3 Rivers Energy Partners (3RE) specialises in the design, build, and operations of renewable natural gas projects.