Beer popularity up

Beer is gaining more popularity in some of the non-traditional beer markets in North India like Rajasthan, Punjab, Delhi and Uttar Pradesh.

Sales in Rajasthan catapulted by 43 per cent in 2006 to 72.13 lakh cases from the 50.39 lakh cases sold in 2005. Sales in Delhi increased by 15 per cent last year to 58.50 lakh cases from the 50.89 lakh cases sold in 2005. Beer consumption in Uttar Pradesh also increased by 21 per cent in 2006, from 37.52 lakh cases in 2005 to 45.38 lakh cases. Similarly, beer sales registered a growth of 33 per cent in Karnataka and 16 per cent in Orissa during the last year. "In the last two years, the states of Haryana and Punjab reduced the duties and license fee for outlets from about Rs.50,000 to Rs.10,000 and to Rs 2 lakh for a comprehensive licence, resulting in less prices for beer from about Rs 70 to Rs 45 per bottle. This caused a market growth of above 400 per cent in these two states in the last two years" noted Sundeep Kumar, director of SABMiller India and an office bearer of All India Brewers Association (AIBA).

Tamil Nadu became the second largest beer consuming state in 2006, overtaking Maharashtra. TN sold 135.37 lakh cases in 2006 with a growth rate of 38 per cent over the previous year. Compared to this, Maharashtra had sales of 129.38 lakh cases sold with only a growth rate of 14 per cent in last year, as against 113.67 lakh cases sold in 2005. Andhra Pradesh still remains the largest beer selling state in the country. However, sales in AP went down slightly by one per cent in 2006 to 180.95 lakh cases from the 182.84 lakh cases sold in 2005.

Sales of beer in India is estimated to grow by 15 per cent during this year, estimate industry experts. About 999.14 lakh cases of beer was sold alone in January this year, growing by 31 per cent from the January 2006 sales figures of 762.73 lakh cases. The national consumption of beer was 1043.12 lakh cases in 2006, an increase of about 17 per cent from the 894.75 lakh cases in 2005. Adult youths constitute 49 per cent of beer consumers in India, and this has increased by 6 per cent in 2006 compared to the previous year, according to the data compiled by AIBA.

The Rs 5,000 crore plus domestic beer market is mainly controlled by the United Breweries and SABMiller groups, which together account for about 25 breweries under their fold. Breweries like Mohan Meakins, Mount Shivalik, Yuksom Breweries, Devan Modern Breweries and Asia Pacific Breweries together control nearly 18 per cent of the domestic market share. With the entry of global beer majors like Heineken, Anheuser-Busch and other players who plan to launch their products in India, beer consumption in the country is set to catapult in future.

Industry sources complain that most of the states are yet to implement the draft alcohol policy recommendation of reduction in duties on beer from about 42 per cent to 35 per cent, in line with global standards. Most Indian States currently impose about eight forms of taxes on beer - excise duty, bottling fee, import duty, franchise fee, export duty, sales tax, vend fee and permit fee. Many states are also yet to consider other recommendations to promote consumption of drinks containing moderate forms of alcohol like beer and wine by implementing uniform MRP, removal of interstate levies, sanctioning of retail outlets for a fixed fee on a long term basis instead of the auction system etc. Another demand is to allow sales in malls and super markets and enforce bottle deposit system like in the case of cold drinks.