NEWS
INDIA REPORT: PREMIUM SEGMENT DRIVES GROWTH AS STATES ADOPT FAVOURABLE POLICIES
By Siulan Law Mathews DipWSET
21-11-2024
Source: Unsplash
India’s alcoholic beverage industry is transforming as some state governments’ policies accelerate sales in the premium segment making it the key growth engine, the International Spirits and Wines Association of India (ISWAI) said in a report.
ISWAI said state governments like Andhra Pradesh, Goa, Karnataka, Maharashtra, West Bengal, and Uttarakhand have recently implemented reforms that helped boost the growth of premium products.
According to ISWAI, single malt whisky, a prime segment in the premium category, witnessed a 150 percent increase in sales between 2020 and 2023, while the sales volumes of Scotch whisky doubled in the same period.
A significant factor contributing to this development is the lowering on excise duties on premium products and the emergence of high-end retail stores offering a range of imported and domestic brands, providing consumers with opportunities to explore and experiment.
In Andhra Pradesh, the state plans to establish 12 premium liquor stores, designed as a distinct category for superior consumer experience. Favourable policies adopted by the state government has led to a 28 percent year-on-year growth in premium segment sales in October 2024, ISWAI pointed out.
In Goa, the state’s decision to eliminate additional excise duties on popular bottled-in-origin (BIO) brands in 2021 saw sales nearly triple from 54,000 to 127,000 cases, with further tax rationalisation in 2024 boosting the segment.
Karnataka rationalised its taxation for the premium segment, driving a 37 percent increase in volumes during September and October 2024 compared to the same period in 2023, ISWAI reported.
In Maharashtra, the duty reduction from 300 percent to 150 percent resulted in lowering BIO prices by over 40 percent, driving market demand and resulting in a 422 percent volume increase of the BIO segment from 132,000 to 632,000 cases.
West Bengal had significant tax cuts in November 2021, reducing maximum retail prices by 7– 40 percent, which led to a 49 percent increase in volumes and a 61 percent increase in premium category sales within a year.
“The progressive policies of various state governments strike a balance between maximising tax revenues and driving a culture of responsible and safe consumption. The large-format and high-end stores, offer a curated selection of domestic and international brands, transforming the consumer buying experience. These outlets provide safer and more inclusive environments for young and elderly consumers,” said Sanjit Padhi, CEO of ISWAI.
(the writer can be contacted at: info@thewinechronicle.com)
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