Liquior Industry

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* Content • Introduction • Performance of the industry • List of major players of the sector. • Legal environment • Social environment • Economic environment • Porter‟s 5 forces model * 3. Introduction • Indian Liquor Industry is divided into 2 broad categories Indian Made Foreign Liquor (IMFL) Country Made Liquor • Indian Liquor Industry with market value of INR 8500 Crore against INR 900 Crore in 1999 & is growing at 12-15% P.A over last 2 yrs. • Shift from country liquor to IMFL because of rising per capita. http://www.livemint.com/articles/2011/11/23210054/B oom-time-for-country-liquor.html * 4. Industry Structure Alcoholic beverages (8500 Crore) IMFL Country Liquor Rs 6150 Crore Rs 2350 CroreBrown Spirits White Spirits Licensed Illicit Whisky Vodka Brandy Gin Rum http://www.livemint.com/articles/2011/11/23210054/ Boom-time-for-country-liquor.html * 5. Major Competitors Manufacturer Brands United Breweries (UB) Group( Bangalore) King Fisher, Kalyani Black Label, Signature, Blue Riband Shaw Wallace (Calcutta) Haywards Jagajit Industries (Kapurthala, Punjab) Aristocrat Mohan Meakins (Solan, Himachal Pradesh) Golden Eagle Associated Breweries & Distilleries (Mumbai) London Pilsner, Smirnoff, Gilbeys Green Label, Malibu, Archer‟s Peach Schnapps * 6. Macro Economic Environment • Legal • Social • Economic * 7. Legal Environment • Ban on direct advertising • Excise regulations and Licenses • „Regulated‟ industry - movement, prices of intermediate goods (molasses, ethanol) tightly controlled - state governments exert considerable influence. • Subject to licensing under Industrial (Development and Regulation) Act, 1956 • Cap on licensed capacity; special license for expansion • Plethora of duties and taxes from bottling to sales stage; varying from state to state. * 8. Custom & Duties • Sales tax, Bottling Fee, Litre Fee, Vend Fee, Privilege Fee, Import/ export Pass duty • Other taxes levied are: Excise Duty : Liquor from spirits - Rs. 45/- bulk litre; Premium Malt Whisky - Rs. 60/- bulk/ litre; Litre Fee - Rs. 20/- bulk litre; Sales tax : 60%; cess 5% • Import duty on whisky, rum, gin & vodka, liqueur - 230 % www.crisil.com * 9. Social Environment • Increase in disposable income • Changing lifestyles of middle class • Western culture influence • Changing Trends – Youngsters, Parties and Celebrations • Hard liquor - from 21 to 25 • In India 40-50 % of all males and 1% of all females Beer - from 18 to 21 Minimum age consumed alcohol last yr. • 62% drinkers classified as light, 29% as moderate drinkers and 9% as hard drinker. http://www.livemint.com/articles * 10. Prohibition in India • Soon after independence, prohibition was imposed in the erstwhile state of Bombay. • The first large-scale movement against alcohol began in the 1970s, when rural women in various parts of the country protested against the sale of liquor in their villages. • Information and Broadcasting ministry of India banned the ads. • Even after the ban, liquor companies continued to advertise their drinks in the form of surrogate advertisements. * 11. Legitimate business & their surrogate advertisements Brands Surrogate advertisements McDowell’s malt whisky McDowell’s Soda/water Radico Khaitan’s 8 pm whisky Radico Khaitan’s water Hayward’s 5000 Beer Hayward’s water/soda Derby Special Derby special soda Bacardi Liquor Bacardi Blast CDs & Cassettes Bagpiper liquor Bagpipers soda and cassettes Kingfisher Beer Kingfisher bottled drinking water Royal Challenger whisky Royal Challenger golf accessories & mineral water & cricket team White Mischief Liquor White Mischief holidays Smirnoff Vodka Smirnoff cassettes & CDs * 12. Economic Environment • It is a well developed - Rs 8,200- 8500 Crores industry in India • Past growth 12 % CAGR per annum • Brown spirits - particularly whisky, rum & brandy account for over 75 % of this market • South and North share 60% of market • Market size –...
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