Below is an over-simplified analysis of the very real differences between India and all other markets; this is drawn from the opinions of Indian management who understand the markets in great depth.
- India is 28 countries in the context of one. (There are 31 states but some are very small). There are at least 23 quite different markets of importance. In practice, these are largely self-contained markets, with limited cross-border sales, except by smuggling.
- Each state levies taxation on alcohol at its own determined rates and excise duties, and controls distribution channels in its own way. It is a state-by-state not a national market. Taxes are levied, often at relatively high rates in relation to Indian prices, on all alcoholic products crossing the state borders. The result is that it is essential to have centres of production spread over the major states.
- The intention to reduce alcohol consumption is written into the Constitution.
- The population is evidently huge (945 million in 1996 and over 1.1 Billion during 2004). It is still growing by 20 million plus every year, though this may have eased in 2003. However, 600 million at least are still outside the market for anything except very cheap Country Liquor. Advertising has always been officially illegal. In practice, all major brands spent heavily on Surrogate brands under the same brand name (on glasses, mineral waters, bottle openers, fashion articles for men etc.).
- The Distribution system is still the same for Beer as for Spirits and Wine. All outlets must be licensed; Wholesalers, Retailers, Bars and Restaurants, and Bonded Warehouse operators. They pay the, varying, States licence fees. These can, at present, only sell Indian-made Liquor over most States. It continues to be expected that Beer and Wine may shortly be permitted to sell in more outlets.
- South India is the largest consumer of IMFL and Beer. It is more important than North and West together. Tax-paid Country Liquor is most important in North and West.
- The West is declining due to high taxes, and the North increasing in Country Liquor and Beer particularly.
Download the full report: India Alcoholic Beverages Industry Statistics.pdf