Spirits industry predicts bigger returns as Delhi lowers legal alcohol age

This is in spite of the government predicting that its tax take will rise by 20% as a result. The state authority is also banning new liquor shops from opening in the capital and says it will no longer run liquor shops. At present, 60% of legal alcohol outlets in Delhi are state run.

The decision was taken, Deputy Chief Minister Manish Sisodia said, to end the reign of what he called a “liquor mafia”. “In Delhi, 850 liquor stores are authorised by the government. But [the] liquor mafia run 2,000 illegal stores,” he said. Some estimates put the volume of bootleg alcohol sold in India at more than 50% of the total consumption. While India’s 29 constituent states remain a patchwork of regulation and licensing laws (six remain dry), observers see last week’s changes in Delhi as encouraging steps towards a national policy. Anand Kripalu, managing director and CEO of Diageo India said: “The new excise policy keeps the consumer at its heart, enabling their access to good quality brands in significantly safer and enhanced purchase and consumption environments.” What he might have also said are that the reforms herald a further opportunity for the major international drinks groups to make bigger inroads to the giant Indian market. Alcohol consumption in India has risen over 72.5% over a period of 20 years (according to OECD figures), and the huge potential for further growth has prompted global groups to make India what Alexandre Ricard, the head of Pernod Ricard, calls a “must win” market. Pernod Ricard has had a strong commercial presence in the country since 2000 when it took over Seagram’s interests in the sub-continent; in 2013/14 arch rival Diageo bought a controlling stake in United Spirits, the country’s biggest spirits business, now renamed Diageo India. Read the full article at: www.thedrinksbusiness.com