Basic Facts (Global):

Revenue in the Alcoholic Drinks market amounts to US$1,664.00bn in 2022. The market is
expected to grow annually by 6.78% (CAGR 2022-2025).
● The market's largest segment is the segment Beer with a market volume of
US$643.00bn in 2022.
● In global comparison, most revenue is generated in China (US$331.10bn in 2022).
● By 2025, 45% of spending and 27% of volume consumption in the Alcoholic Drinks
market will be attributable to out-of-home consumption (e.g., in bars and
restaurants).

The Alcoholic Drinks market has witnessed a secular decline in volume sales in developed
markets while demand in emerging markets is still growing.

Basic Facts (India):

India is one of the fastest growing alcoholic beverages markets globally, with an estimated
market size of USD52.5 billion in 2020.
The alcoholic beverages generated around USD48.8 billion in sales revenue in 2019.
The alcoholic beverages industry contributes to around 1.5 million jobs in India.
Factors such as rapid urbanisation, changing consumer preferences and a sizeable and
growing middle-class population with increased purchasing power have contributed towards
growth in demand for alcoholic beverages.

Problems in the Indian Context

Alcoholic beverages are among the top three sources of revenue earning across most
states.
The governance and pricing models for alcoholic beverages vary widely across the states
creating a lack of transparency, predictability, and clarity.
The states, through their excise policies, control the entire supply chain of alcoholic
beverages from manufacturing and distribution to registration and retail. There are frequent
and ad-hoc changes in these policies, creating uncertainty and preventing manufacturers/
distillers from planning their investment.

Covid 19
During the COVID-19 pandemic, around 21 states have increased excise duties, additional
excise duties, maximum retail price (MRP), bottling fees, and imposed COVID-19 specific
fees, cess and surcharges to avoid revenue shortfall and meet consumer health needs.

In states such as Assam, Rajasthan, Karnataka and Uttar Pradesh, changes were brought
in through hike in excise duty slabs; while in states such as Delhi, Haryana, Odisha and
Telangana, specific COVID-19 related cess/fees were implemented.

The impact on final prices of the products ranged between 5-25 per cent; except in Delhi,
where prices increased by 70 per cent initially due to imposing of a special corona fee of the
same percentage.

Between March and September 2020, pan India sales volumes were lower by 25-30 per
cent. Consequently, revenue earnings were lower; specifically, Delhi had a loss in revenue
of around 25 per cent, while it was around 40-45 per cent in Odisha.

Higher taxes led to lower revenue collections, which eventually prompted the states to
readjust the taxes and some states started to offer sales through online channels.

Despite all these hindrances, India managed to emerge as one of the top 5 countries
bringing in revenue from alcoholic beverages, these spots were previously taken by
European countries like Germany and France, or Brazil.