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ALCOHOL CONSUMPTION TREND IN INDIA

Globally consumption of spirit is on decline and wine has stabilized. Only small drinks are on slight

rise. Growth rate of consumption of spirits and wine has been highest over 1992-97 in UK, India and

Australia (over 33%).

The following histogram shows that globally alcohol is imbibed largely through Beer & much less

through spirits & wine, whereas, the case of India is just the opposite.

INDIAN ALCOHOL CONSUMPTION TREND (FY 2005)

INDIAN LIQUOR:

Branded spirits market in India is 119 million cases out of which Whisky accounts for

55%, Rum 27%, Brandi 14%, Gin 3%, Vodka 1%. North and west India consumes more of

whisky and South, more of Brandy and Rum. The UB Group (35%) has a market share of 35% + 13% =

48% after merger of Spirits Division of Shaw Wallace (13%), Jagajit (7%), Mohan Meakins (7%) and IDL

(3.5%). The key MNCs operating in the India include Diageo, Seagram, Bacardi. About 80% of whisky

is sold at below Rs.200 per bottle and 1% above Rs.600.

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AP (24), TN (19.3), Karnataka (11.2), Kerala (10.9) & Rajasthan (5.7) consume 60 % of the total IL,

which is growing at about 11%.

COUNTRY LIQUOR:

About 115 million cases of CL is sold in the country and the growth rate is 0.5%. The

CL market is highly regulated, sold generally as commodity, often dominated by cartels, traders get

disproportionate share of MRP. CL companies predominantly are state centric e.g. Saraya & Radicoin UP, GM Brewery & Vasant Dada in Maharashtra, IFB Agro in West Bengal, Som Distillers and Kedia

in MP, Glenn in Haryana etc.

A.P., Karnataka and Tamil Nadu have abolished RS based CL in favour of cheap ENA

based IMFL. UP (19.5), Maharashtra (19.3), Karnataka (13.6), Punjab (10.2) & Haryana (9.4)

consume 63% of the total CL.

BEER:

The Indian beer market is 93 million cases and has grown at 5.54% p.a. over 2003-05.

Several parts of India are showing much higher growth rates. Five States, Andhra Pradesh (18.3),

Maharashtra (16.2), Tamil Nadu (9.0), Karnataka (9.0), & Rajasthan (5.6) account for 63% of total

beer consumption and top 10 States for 85%.

Indian beer industry due to merger and acquisition is dominated by two top players

(i.e. UB and SAB Miller together have a market share of 75%) and provide attractive

profit margins due to the consolidated nature of the industry. The Chinese beer market in contrast

is marked by intense competition with 400 brewers. The top 10 brewers account for only 45% of the

market. Lower taxes on beer, falling distribution margin and prices have contributed to the surge in

the consumption of beer in India.