India: Beer sales in Maharashtra decline on steep rise in prices

Despite a scorcher of a summer, the state of Maharashtra is cooling down less with beer, primarily because of a steep rise in its prices, the Mumbai Mirror reported on May 17.

Though the state has been a degree hotter in the past couple of months than it was last year during the same period, its consumption of beer has dropped by 6 per cent.

According to a senior official in the state excise department, in March and April this year Maharashtra consumed 5.91 crore litres of beer compared to 6.29 crore litres in the same two months in 2017.

Even year-on-year, consumption of beer in the state has dropped. In 2016-17, Maharashtra gulped down 32.48 crore litres of beer, while it dropped to 27.59 crore litres in financial year 2017-18.

In sharp contrast, Indian Made Foreign Liquor (IMFL) is moving off the shelves quickly with prices holding steady for the past two years. In April 2018, the state consumed 1.61 crore litres of IMFL, compared to 1.49 crore litres in the same month in 2017.

In October last year, the state government increased excise duty on beer by 17 per cent, but did not allow manufacturers to increase retail prices. This resulted in a shortage of beer in the market as manufacturers cut back on supplies. The matter was resolved after state agreed to increase maximum retail price of beer from 3.50 times of manufacturing cost to 3.75 times in the case of mild beer and 4.60 times from 4.25 times in the case of strong beers.

This resulted in an increase in prices by Rs 10 to Rs 15 per bottle. A bottle of Kingfisher Premium now costs Rs 155 and Kingfisher Strong costs Rs 160.

Dilip Giyanani, chairman, Maharashtra Wine Shop Owners Association, however, claims the impact of price hike has been deeper than what official figures reveal. “On an average across all segments, beer sales have dropped by 15 to 20 per cent. In the premium segment, the drop has been the steepest at 35 per cent, followed by 20 per cent in regular segment. In the economy segment, the sales have dropped by 12 per cent.”

The state government earned revenue of Rs 12,288 crore in financial year 2016-17 and Rs 13, 448 crore in fiscal 2017-18, an increase of 9.4%, from the sale of all kinds of alcoholic beverages, including country liquor.

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