Rajasthan to brew more beer

Beer-brewing capacity in Rajasthan is set to increase because of the change in the retailing policy initiated by the state government since April this year.

Starting this financial year, the Rajasthan government moved over to a licence-based retailing of alcoholic beverages against the earlier auction-based system.

Though confirmation from state government sources was unavailable, industry sources said tax revenue collected from the sale of beer in Rajastan had increased to Rs 117 crore during the first six months of this financial year against Rs 55 crore collected during the same period last year. Tax collection from the sale of IMFL has also increased to Rs 156 crore during the first six months.

While the tax revenues from sales of alcoholic beverages had doubled during the first half of this financial year, existing breweries in the state are looking at expanding capacity, apart from the two greenfiled projects taking shape there.

While the UB Group and Deven Breweries would be setting greenfield projects in the state, SABMiller, the world's largest beer company, is planning to double its capacity in the state from the present level of 30 lakh cases per annum.

The UB Group had recently said that investment to the tune of Rs 100 crore has been earmarked for greenfiled projects and expansion of existing units. The country's largest beer manufacturer will be investing in greenfield projects in Rajasthan, Orissa and Uttar Pradesh.

The Group chairman Vijay Mallaya had, at the recently conculded shareholders meeting, said that Rajasthan was one of the fastest growing markets in the country.

The increase in production of beer in the state will also have an impact on the agriculture sector, since Rajasthan is the country's largest producer of barley. Malt derived from barely is one of the key inputs used in the manufacture of beer, constituting as much as 60 per cent of the cost of the final output.

According to sources in the union agriculture ministry, of the 14 lakh tonnes of barely produced in the country an estimated 30-35 per cent is grown in Rajasthan.

Discontinuing the auction-based retailing in alcoholic beverages is also expected to put a stop to illegal sale of alcohol outside the state. Under the auction system, contractors who buy stock in excess of the demand within the state, were forced to sell the excess stock in other states like Gujarat.