Liquor sales growth has slowed dramatically in the nine months to September, with experts attributing this to floods in some states and an increase in taxes muting demand amid the broader economic slump that has seen consumption taking a hit.
Adding to the impact on numbers is the high base of 2018, when the market grew 10% to a six-year high.
The sales volume of locally-made versions of foreign liquor expanded 1.4% in the September quarter with the growth rate tapering off for whiskey and brandy while the vodka and gin segment declined, industry executives said, citing excise department data (see graphic). A year ago, the market had grown 12.9% in the same quarter.
Indian-made foreign liquor (IMFL), with brands such as Royal Stag, McDowell’s, Blenders Pride and Officer’s Choice, are locally-produced, adapted versions of European spirits and account for more than 70% of the market.
“The overall slowdown is consumption led and more severe in the rural markets,” said Ahmed Rahimtoola, marketing head at Allied Blenders, which sells Officers Choice, the world’s top-selling whiskey brand. “The increase on duties and taxes in certain states has accentuated the problem.”
Between April and June, the segment grew 2% owing to restrictions because of general elections that disrupted demand for liquor, slower than March quarter expansion of 2.8%. The quarter ended September saw channel disruptions after the Andhra Pradesh government took control of liquor outlets in the state as well as liquidity issues in north India, companies said.