GOVERNMENT REAPS BENEFIT FROM INCREASED BEER SALES .....

North India is enjoying beer like never before. During the first quarter of 2006, nearly 5 million cases of beer were sold in Punjab and Haryana as against 600,000 cases in Q1 of 2005-06. Overall the 105 million cases-a-year Indian beer market is set to register a 15 percent growth in 2006-07 to cross 120 million cases, thanks to the phenomenal growth in the two states.

Punjab, Haryana and Chandigarh witnessed record growth in government taxes following the recent policy changes. If we look at the April to July 2006 figures, the recent policy changes have increased the govt revenue in Punjab by 15.07 percent, Haryana by 19.65 percent and Chandigarh by 500 percent. The prime reason for this growth in government revenue can be related to the growth in beer sales in these three states. The new alcohol policy has come as a boon for these states in economic distress. In previous years, government revenue in Rajasthan and UP also increased by 50–100 percent due to similar policy changes.






.....WEST BENGAL FOLLOWS SUIT

As a step towards implementation of the model policy for alcohol , the West Bengal govt has recently announced a reduction in the Import Duty and Local Excise Duty, to be implemented from 1st November 06.

The detail of the duty changes are as follows:

MARKET SHARE BREAKUP - INDIAN BEER INDUSTRY

The Indian Beer industry pegged at Rs. 6000 crores is rapidly growing with sales of over 100 million cases a year. With almost 55% of the population in the age group of 21 to 59 years, the potential for growth is huge. Higher income level, changing lifestyle and consumption patterns are all expected to drive this growth.

Last year the growth rate in the sector was a record 14% where a slugfest is on between the domestic players like UB Ltd., SABMiller India, Mohan Meakins Ltd., Mount Sivalik Breweries Ltd., and Yuksom Breweries Ltd and global rivals like Heineken, Budweiser, Cobra and APB eyeing this growing market.

Traditionally the South and West have been the traditional markets for beer (TN, AP, Karnataka and Maharashtra have sold about 68 million cases of the 100 million case beer last year) mainly because of high density of urban population in these states, high per capita income and absence of winter which makes it a year long market without seasonality.

Recently some of the Northern states switched from the auction to the licensing system bringing down the price of beer by at least Rs. 20 in several of these states. Consequently the expected volume of sales for 2006-07 in Punjab, UP, Haryana, Chandigarh, Rajasthan and Delhi is pegged at 27 million cases, an eye popping 32% growth from the 20.5 million cases, the previous year.