Ost United Spirits

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  • Topic: Vijay Mallya, United Breweries Group, Scotch whisky
  • Pages : 22 (5003 words )
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  • Published : February 22, 2013
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INTRODUCTION
INDUSTRY PROFILE:
Alcohol Industry In India
Indian Liquor Industry with estimated market value of INR 340 billion is growing at 12-15% over the last two years. The industry is estimated to have sold 115 million cases of IMFL last year. The sector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodka is expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steam the sector is about to witness next phase with realization rising in line with that of their foreign counterparts.

There are 325 distilleries in India, with an installed capacity of about 3.58 billion liters of liquor. However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters.

About the Industry
India’s country liquor industry is known for chaotic business, and estimated at Rs 220 billion, with annual volume sales of over 200 million cases. Of course, the India-made foreign liquor (IMFL) sales are pegged at around 150 million cases, and growing at 8 to 10 per cent annually. IMFL and country made liquor account for the bulk of alcoholic consumption. The Indian beer Industry has been witnessing a steady growth rate of 7-9 per cent per year for the last ten years. Per capita beer consumption is still low at 0.7 litre per year. Though the current growth is pitched at 13 per cent, the total beer market is expected to more than double to 23.3 million hectoliters by 2012. Apart from Kingfisher and Foster’s Beer, the other brands in the Indian market are Carling Black Label, Carlsberg, Dansberg, Golden Eagle, Haywards 5000,Premium Lager, Kingfisher Strong, Hi-Five etc. to name a few. India has emerged as one of the fastest growing markets for wine consumption on the global map. The Indian wines are growing annually at the rate of 25 per cent. With a population base of over 1.1 Billion, the

consumption of wine is extremely low, indicating vast potential for future growth. Champagne Indage has been the pioneer in making French style wine in India. Grover Vineyards and Sula Vineyards too have made smart strides in a short time span. Recently, companies in the Indian Made Foreign Liquor (IMFL) space like Diageo, United Breweries and Seagrams too have ventured into making wine. Other major’s players in this field are United Spirits Ltd, Mohan Breweries & Distilleries Ltd, Jagatjit Industries Ltd, Empee Distilleries Ltd. Radico Khaitan Ltd. ,Indus Wine .etc. to name a few. The total liquor industry is worth Rs 20 billion. IMFL accounts for only a third of the total liquor consumption in India. Most IMFLs are cheap and priced very low. Whisky accounts for 60 per cent of the liquor sales, while rum, brandy and vodka account for 17 per cent, 18 per cent and 6 per cent respectively.

India presents a huge growth potential for alcoholic beverages sales. The government is planning to do away with the license requirement for manufacturing potable alcohol. Scrapping the licensing requirement would boost manufacture of beer, wine, whisky, rum, brandy and other alcoholic beverages. Increasing GDP, favorable growth in the demographics with a growing urban middle class, growth of modern retail formats, hopeful rationalization of the taxation rules and ban on local country liquor and rising health consciousness, age preferences will act in favor of the growth of alcoholic beverages in India in the near future. Of the few industries that have seen a no-bars-hold entry of MNCs, alcoholic beverages perhaps top the list. Most global liquor majors have set up shop in India over the past five years, and actively pursued market opportunities despite debilitating constraints. This is because the liquor industry, witnessing a declining trend worldwide, has shown robust growth in India, bucking the recessionary trends in the economy and the anti-growth liquor industry policy.

It is India's potential for whisky -- it accounts for about...
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