Winning Bizness Desk
Mumbai. If you consume alcohol then there are chances that you can get it at a lower rate. This is because in the upcoming general budget to promote exports from the country, the International Spirits and Wines Association of India has expressed concern about the high tax levied on alcohol products of premium brands and requested the government to reduce it. The association says that premium brands in the AlcoBev industry attract 67 to 80 percent tax. Due to this, it becomes difficult for the suppliers and those doing business with them to extract their operation cost. Due to such a high rate of tax, these brands sell less. If the tax is reduced, then there can be an increase in sales.
The industry is in deep trouble
ISWAI CEO Neeta Kapoor said that the Indian alcovev industry is in a deep crisis due to inflation and high tax rates. Unless quick action is taken to reverse the situation by reducing taxes or increasing product prices, India may soon face a situation that would be akin to killing a golden goose. Kapoor says that every sector has the freedom to increase the prices of its products, but liquor is one such industry where the prices are decided by the governments. The state and central governments generate about 25 to 40 percent revenue from the liquor industry. Now if the prices are increased then the industry can come out of the crisis. Where the raw materials like molasses and grains used to prepare wine, beer and whiskey have also become expensive.
India is the ninth largest market in the world
The Indian alcoveve industry employs 1.5 million people and has an estimated market size of USD 52.5 billion (2020), the ninth largest in the world. ISWAI Secretary General Suresh Menon said, the gross margin for manufacturers of Indian Made Foreign Liquor during the quarter ended September was lower as compared to the same period a year ago due to higher cost of ingredients. ISWAI estimates that cereals such as Extra Neutral Alcohol and barley are 12% and 46.2% more expensive than last year, while the cost of packaging materials such as glass and mono cartons increased by 24.9% and 19%, respectively. If the central government and the state government reduce the tax, then distressed alcovev manufacturers in India will get a lot of help.
