In order to give a fillip to the Indian beer industry, the All India Brewers Association (AIBA) has called the state governments to draft their excise policies on the basis of the Model Excise Policy suggested by the food processing ministry. AIBA has also called for adopting the retailing of beer on a fixed fee basis as opposed to the auction system.
In 2004-05, the beer market was pegged at 9.4 crore cases and registered a growth of 14% to touch 10.9 crore cases, because of the excise policy of Rajasthan and Karnataka.
These two states also moved from the auction system of retailing to a fixed fee system, thus impacting the volume sales of beer. If other states also follow this, it would promote the beer industry, which is by far safer than hard liquor. AIBA is also recommending removal of inter-state levies and restriction of licence fees to exceed 5% of MRP.
The food processing ministry in its model excise taxation paper has called for the preferential treatment to beer. It has argued that the growth of beer industry, will lead to multi-fold benefits to the farmers.
"If the demand for beer in India were to grow to the same level as spirits, the demand for malted barley along with other crops used for beer production would increase 20-fold, and over 10 lakh farmers would benefit. Similarly, the economic value generated at the farm level from barley used by the beer industry would go up from approx Rs 60 crore to Rs 1,200 crore," the paper said.
Cultivation of hops (flavouring and stability agent in beer) presents another major opportunity for farmers, as it is grown in hilly regions where crop opportunities are few, the paper adds. As per industry estimates, 45-50 tonne of hops worth Rs 70 lakh is currently being grown in India impacting 650-700 farmers.