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Alcohol Industry

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Indian Alcoholic Beverage Industry – Overview

India is the third largest market for alcoholic beverages in the world. The demand for spirits and beer is estimated to be around 373 million cases. (Source: Annual Report, Government of India, Ministry of Food Processing Industries). The Alcohol Industry in India can be divided into the following five categories: -
1. Industrial Alcohol
2. Potable Alcohol
3. Mixed Distilleries (Industrial and Potable Alcohol)
4. Bottling Plants (purchasing alcohol and bottling alcoholic beverages)
5. Distilleries producing alcohol from substrates other than molasses.

In India, majority of distilleries manufacture alcohol from Sugar Cane Molasses compared to international trend of grain based (rice, wheat, millet, Barley, corn and oat) alcohol. In India, since alcohol is largely produced from sugarcane molasses, the industry is cyclical in nature, as sugarcane production itself is affected every 3-4 years due to monsoon and other factors, resulting in low availability of molasses.

Alcohol industry is the second largest source of revenue of the State Exchequer – Rs.25, 000 cores. The Industry turnover is ~Rs.54,000 core (Source: Euro monitor International 2009). It is the only Industry where inputs are decontrolled (free market price) and output is controlled (selling price is determined by State Excise in most States).

The Indian spirits market has grown rapidly owing to rapid economic growth, rising disposable incomes, favourable demographics and greater social acceptability of alcohol consumption in India. In particular, according to Euro monitor International 2009, the sales volume of spirits products is expected to reach 2.2 billion litres by 2013. India has traditionally been among the world’s lowest per capita consumers of foreign spirits such as whisky, rum, brandy, vodka and gin. Indian Made Foreign Liquor (IMFL)

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