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Beer sales dropped in 2017 for the second consecutive year, as a result of the ban on liquor sales near highways, a few states and rise in prices, according to a report in The Economic Times. The volume of beer consumed in India dropped to 259.19 million cases from 287.99 million cases in 2016, which is nearly 10 percent. This year's performance is the worst by the beer industry in the past two decades, some of the companies told the paper.
The decline in volume in 2016 was 0.4 percent and there was mid-single digit growth in the industry between 2013 and 2016.
Ben Verhaert, head of India operations of Anheuser-Busch InBev, said: “There was an impact of demonetisation and highway ban in the first half of the year. The second half was better and is still recovering. Despite industry declining, there is a strong trend of premiumisation which we expect to further accelerate this year.”
In April, the Supreme Court ordered shutting of close to one-third beer outlets. As a result, many distributors had already reduced their orders in India since February, due to the vagueness of the directives in place. After the highway ban, many alcohol outlets remained shut until the last quarter.
Many of the states made things difficult for the industry. Since 2016, Kerala, Bihar and Tamil Nadu have banned liquor completely or in phases, and they make 20 percent of India’s alcohol consumption. Maharashtra raised excise duty on beer by 17 percent. Companies were left confused about the new pricing structures and rules, which led to many losses.
United Breweries said: “During this period, UBL did not sell its main brands. However, the matter has since been successfully resolved and business resumed at the end of the quarter.”
After a 16 percent growth in 2016, Danish brewer Carlsberg saw a sharp 2 percent decline in its volume in India in 2017. Cees ‘t Hart, global chief executive officer, Carlsberg, said that GST and the highway ban have made 2017 a very volatile year. “India with all kinds of regulations and changes will remain a rocky road and therefore, that could make or break our yields in India.”
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