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Foreign premium liquor brands to get 35% cheaper in Maharashtra, price change may reflect in 6-8 weeks

"Contribution of foreign liquor brand to overall volume in Maharashtra will be around 4-5 percent", says analyst Karan Taurani/

November 23, 2021 / 03:57 PM IST

Maharashtra government has announced 50 percent cut in excise duty on imported liquor and this will make premium liquor brands cheaper.

Foreign liquor brands including Black Label, Glenfiddich, Chivas Regal and Lagavulin 16 will get 25-35 percent cheaper, said analyst Karan Taurani, Senior Vice-President, Elara Capital.

"During the COVID wave, states charged exorbitant taxes and they saw huge decline in volumes. Tax hikes by states was around 10-12 percent pre-COVID. During COVID- it went up to 18-20 percent. This year it was 4-5 percent. State governments have realised that there is no point charging high taxes as it will impact excise duty collections. Maharashtra is one of the expensive markets for liquor, scotch, premium brands. Hence, this (50 percent reduction in excise duty) was need of the hour," he said.

Taurani added that the transition period for new prices to reflect is expected to be two months.

Abanti Sankaranarayanan, Chief Strategy and Corporate Affairs Officer, Diageo India said that reduction in excise duty on imported spirits in Maharashtra is in line with what they are seeing in other states.

"The reduction in duties will make these brands more accessible for consumers in Maharashtra, in line with states like Delhi, Haryana, West Bengal and Goa and is in sync with the strong consumer trend of premiumization in beverage alcohol," he added.

When it comes to contribution of premium brands to overall volume, Taurani said that the category has a small share.

"Contribution of foreign liquor brand to overall volume in Maharashtra will be around 4-5 percent. But the good thing is that markets like Maharashtra, Delhi are metro markets so the share of this category is higher than national average. Maharashtra as a state, its spirits volume contribution is 6-7 percent. If you look at larger bands like UNSP (United Spirits) they have a sizeable presence in the state because the opportunity is large in terms of pricing. And there is a big consumption pool for premium brands. So, value wise Maharashtra is a big market," he said.
Maryam Farooqui
first published: Nov 23, 2021 03:46 pm

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