Highway Liquor Ban –Harbinger of bad news
It is bad omen for the liquor industry! The very first month of the new financial year has brought disheartening news for the industry. The overall sale of alcoholic beverages is down by 5% in April. The ban imposed by the Supreme Court on the sale of liquor, within 500 meters of national & state highways has impacted the figure.
The band led to the closure of about a third of the country’s liquor vends, causing a secular drop in demand for whiskey, brandy, rum, vodka and gin. The April decline was sharper in mass or price-sensitive products, extending the trend of the last financial year in which the industry sales fell 2.2%.
After the Supreme Court’s mid-December judgment, several companies chose channel de-stocking as there wasn’t enough clarity on the implementation of the curbs. The disruption also hurt January-March quarterly sales before 30,000 shops were shut in April.
The liquor industry in India has been expanding at a compounded annual growth rate (CAGR) of over 12% in the decade to 2011.
In April, the industry saw sales of 23.47 million cases (each case is nine 1-litre bottles), down from 24.69 million cases a year ago, according to industry data. In absolute volume terms, this translates into roughly 1.2 million cases — or more than 10 million 1-litre bottles. Within the overall spirits market, whiskey accounts for roughly 60%, and demand for it fell 1%. Half the volumes were in the regular category, which declined 9%. Brandy, which makes up a fourth of the total market, declined 11%.
Already under rough weather, this is surely not a good news.
