New excise policy gives boost to beer consumption

With a new excise policy in Punjab, the demand for beer has increased manifold in the state and this sudden spurt in demand has taken even beer-manufacturing companies by surprise.

While the sale in 2005 was 1.2 million cases, in April 2006 alone, the companies have sold 800,000 cases. The same is the case with the Union Territory of Chandigarh, where 150,000 cases were sold in 2005, and in April this year, 90,000 cases have already been sold.

This increase in demand for beer has resulted in a shortage in states like Himachal Pradesh, Jammu and Kashmir and also in some parts of Punjab. But those on high spirits need not worry as the beer companies have assured that stocks are likely to be replenished within few days.

A high profile executive of Fosters Beer, on the condition of anonymity told that last year, a total of 82,000 cases were sold in the state of Punjab. ``In April 2005, we sold approximately 8,000 cases as compared to 32,000 cases in April this year. This month, we have already sold 55,000 cases but in May 2005, we sold just 8,000 cases. Last year, we sold approximately 10,000 cases in Chandigarh but this year, in the month of April alone, we have already sold 11,800 cases of Fosters beer. In Punjab, we are expecting to sell atleast 3.5 to 4.5 lakh cases this year.''

Sources add that nearly 2.75 lakh cases of Kingfisher beer sold this April, as against nearly a lakh last year.

Last year, beer was priced at not less than Rs 75 a bottle. This year, while the maximum price of beer fixed by the government ranges from Rs 40-45 a bottle, the contractors are selling it for as low as Rs 35 to beat competition. Beer companies have also introduced a pint (330 ml of beer), which does not cost more than Rs 22 at most vends, and suits buyers fine. To beat the heat, many people prefer beer over soft drinks because a can of any soft drink is priced between Rs 15 to 25.

An official of South African Breweries having brands like Hayward's and Royal Challenge Beer told that last year we sold 25,000 cases in the month of April and this year we have already sold 1.45 lakh cases in Punjab. "Last year our company sold a total of 140,000 cases and we are expecting to sell atleast one million cases this year.''

Companies feel that the reason for the reduction in the price of beer is because earlier, there was monopoly of just one company in Punjab. ``That particular company sold whichever beer they wanted to. Second reason for it is that the sales tax on beer has been reduced to 4 percent from 22 percent last year.

Earlier when a company imported beer from some other state, it had to pay Rs 7 per bulk liter. This has also been reduced to Rs 1 per bulk litre. The ratio between the consumption of beer and hard liquor is 65:35,'' a company official told requesting anonymity.

Beer companies are expecting their sales to increase by at least four to five times this year.