indian liquor industry- a snap shot
Liquor industry-In 2013…
India is the 3rd largest liquor market in the world.
One of the fastest growing markets in the world, on the back of demographics & economy.
The overall retail market size of liquor is ~$35 billion per annum.
Strong MNC presence with Diageo, Beam Global, Pernod Ricard, Heineken, SAB Miller, Carlsberg and more.
There are 3 broad categories – IMFL (Indian Manufactured Foreign Liquor which includes whiskey, rum, brandy, vodka & gin), Beer and Country Liquor (cheaper, spiced liquor).
Each of these segments has a volume of between 230-260 million cases per annum. Hence, the market is divided almost equally by volume.
Overall growth of the market is ~8% per annum, mainly driven by IMFL and beer, Country liquor is a slow growth market.
Beer has been consistently growing at over 15% per annum over the last few years.
However, the IMFL market is much larger in terms of value – by the sheer difference in price per bottle. Hence, the IMFL market would be over 65% by value and beer would be ~15% by value.
FDI – 100% FDI is permitted in the alcoholic beverages sector.
Taxation is high, Price is controlled – Excise duties, sales tax, VAT and various intermediary margins contribute bulk of the retail price.
In most states, the government tightly controls the retail price of liquor; a tender process is used to determine prices and volumes that will be bought by the distributors.
It is estimated that a significant portion of sales in India goes unreported due to taxation structures.
Regulatory structure creates high entry barriers-Independent Licenses are required to produce, bottle, store, distribute or retail all liquor products.
The Indian beer market is oligopolistic, with the top 2 brands accounting for nearly 80% of the volumes. The top 3 players are – United Breweries (57% share), SAB Miller India (20% share), Carlsberg India (~6-8% share).
There are another 8-10 significant players in the $10 mn to
India is the 3rd largest liquor market in the world.
One of the fastest growing markets in the world, on the back of demographics & economy.
The overall retail market size of liquor is ~$35 billion per annum.
Strong MNC presence with Diageo, Beam Global, Pernod Ricard, Heineken, SAB Miller, Carlsberg and more.
There are 3 broad categories – IMFL (Indian Manufactured Foreign Liquor which includes whiskey, rum, brandy, vodka & gin), Beer and Country Liquor (cheaper, spiced liquor).
Each of these segments has a volume of between 230-260 million cases per annum. Hence, the market is divided almost equally by volume.
Overall growth of the market is ~8% per annum, mainly driven by IMFL and beer, Country liquor is a slow growth market.
Beer has been consistently growing at over 15% per annum over the last few years.
However, the IMFL market is much larger in terms of value – by the sheer difference in price per bottle. Hence, the IMFL market would be over 65% by value and beer would be ~15% by value.
FDI – 100% FDI is permitted in the alcoholic beverages sector.
Taxation is high, Price is controlled – Excise duties, sales tax, VAT and various intermediary margins contribute bulk of the retail price.
In most states, the government tightly controls the retail price of liquor; a tender process is used to determine prices and volumes that will be bought by the distributors.
It is estimated that a significant portion of sales in India goes unreported due to taxation structures.
Regulatory structure creates high entry barriers-Independent Licenses are required to produce, bottle, store, distribute or retail all liquor products.
The Indian beer market is oligopolistic, with the top 2 brands accounting for nearly 80% of the volumes. The top 3 players are – United Breweries (57% share), SAB Miller India (20% share), Carlsberg India (~6-8% share).
There are another 8-10 significant players in the $10 mn to