Beer in India

PRE-COVID-19 PERFORMANCE

Complex Indian tax regime for beer makes beer more expensive than alcoholic drinks with a much higher ABV

In India, the treatment of excise duty in 2019 was decided by states which follow a policy where beer is taxed not on alcohol content but is determined by volume and price. As a result, beer is much less accessible to consumers than Indian Made Foreign Liquor (IMFL).

Non/low alcohol beer offers new product development possibilities

During 2019, industry players continued to investigate the huge opportunity for non alcohol beer in India, especially in states such as Gujarat, Bihar, Nagaland and the union territory of Lakshadweep, where consumers do not have access to alcohol. Such products not only target Indians who do not consume alcohol or have no access to it, but also provide existing consumers with an additional lighter option.

UB Group retains dominance in beer

UB Group continued to hold an outright lead in beer in 2019. The company was present with 23 of its own breweries and nine contract units spread throughout the country, enabling it to achieve a national distribution network.

2020 AND BEYOND

COVID-19 impact

On-trade volume sales of beer are expected to fall by 37% in 2020 in light of the impact of COVID-19. This compares to an expected 4% rise forecast for 2020 during research conducted in May 2019, ie before the spread of COVID-19.

Affected products within beer

The reopening of food/drink/tobacco specialists nationally brought about some much-needed respite after a 40-day lockdown. However, this was short-lived due to the introduction of the COVID tax ranging from 10% to 75% in different states, which had a particularly adverse effect on the beer sector.

Recovery and opportunities

Beer sales growth is likely to bounce back to pre-pandemic levels in 2021 due to a release of pent-up demand. However, growth rates will slow from 2022 until the end of the forecast period as the high prices of beer will put this category outside the financial reach of consumers concerned over the devastating impact of the virus on the country’s economy.

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