The demand for alcohol has increased between January and March this year, recording a revival from the highway ban imposed last year. Increased stability resulting from the distribution changes made in certain states has also contributed towards the rise in alcohol sales.
The Supreme Court banned the sale of liquor near state as well as national highways in 2017, thereby effectively leading to the closure of around 30,000 liquor vends across the country. As a result, the demand for spirits and beer fell considerably.
The ruling was subsequently clarified by the Supreme Court, and the conditions for the sale of alcohol were eased, thereby enabling a number of outlets to reopen.
The sale of alcoholic beverages across India fell for the second year in succession in 2017, with beer volumes declining by almost 10% and spirits sales falling by 3%.
Allied Blenders’ marketing head, Ahmed Rahimtoola, said that the decrease in alcohol sales because of the highway ban is now a thing of the past. He added that about 90% of the outlets that had shut due to the ban are now open again and things are getting back to normal. Allied Blenders is the seller of the planet’s biggest spirits brand – Officer’s Choice.
Since 2016, Tamil Nadu, Bihar and Kerala, which are responsible for nearly 20% of India’s liquor consumption, have introduced differing degrees of prohibition. Besides, policy revisions in Jharkhand, Chhattisgarh and West Bengal allow alcohol states only via government-run corporations, furthering the uncertainty. As a result, companies had to hold back and refrain from pushing their products aggressively in such states to lower the credit risk of distributors and dealers.
Thanks to the distribution changes, alcohol consumption is expected to increase in the coming months and the outlook for growth is positive.
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