Due to the lack of new liquor brand launches and rising taxes for liquor based products, sales in India has dropped for the first time in nearly 15 years. According to data gathered from liquor companies, liquor sales has dropped 1-2% in the last year. Since 2000, liquor sales had gradually increased into the 10-15% range but in the past 4 years, due to heavy taxation, the sales have dipped into the single digits.
Due to slow economic expansion, liquor companies have turned their attention to grabbing market share from their rivals instead of expansion of market. Talking to Livemint, Santosh Kanekar, a former liquor marketer and promoter at investment advisory firm BeLive Corp said, ““Demand in the market is still depressed. Growth has came largely from brands stealing market share from one other. In 2016, we will see more activity as brands try to win back lost market share.”
United Spirits Ltd, the largest liquor company in India, has continually lost its market share to rivals Pernod Ricard and Allied Blenders & Distillers Pvt. Ltd due to the decline in sales of its two marquee products, Bagpiper and McDowell’s whiskies. Due to USL’s continued focus on premium products, the brand has seen a sharp decline in the sale of its regional products. Meanwhile, Allied Blenders and Pernod Ricard registered volume sale increases at 10% more than USL. Allied Blenders, to further gain market share, has plans to launch new liquor brands this year.
Although the volume growth has increased for a number of these liquor brands, overall sales has plummeted to the lowest it has been since 2000. The rise is directly attributed to the increase in taxes and the lack of new and unique liquor products being launched.