India’s alcoholic beverage (alcobev) industry needs a strong regulator for a healthy and sustainable growth, said Siddharth Banerji, managing director of Kyndal Group. Banerji, with more than three decades experience in the industry, added that this will also help in moving towards GST for liquor and reduce the many ills of alcohol consumption.
Kyndal Group is an independent alcobev company that manufactures, markets and distributes premium brands like Absolut Vodka, Remy Martin and Jim Beam, among others, in the Indian sub-continent, Far East and the Middle East.
“We are a very young country with rampant alcohol abuse. The alcobev industry in India is huge around growing. It is extremely important that we have a regulator as every state excise department keeps experimenting with route-to-market and duties. It is not good for the consumer and the industry,”he said.
Banerji feels that the Indian alcobev industry is very similar to the US market with alcohol being a state subject. US introduced regulation after prohibition was lifted.
“It is extremely difficult now in India with a single product priced differently in each state. High tariffs are not helping the economy and the industry. It encourages smuggling and under-invoicing.The Government is not helping the industry,” he said.
Regarding the performance of the alcobev industry in the last fiscal, he said that loss of volume has more to do with the lockdown and closure of shops. Sales of Indian Made Foreign Liquor (IMFL) has declined by 12% year-on-year during FY21 due to the pandemic induced lockdown and increase in taxes, according to the Confederation of Indian Alcoholic Beverage Companies (CIABC),the representative body of leading Indian alcohol beverage companies.
“The industry is very resilient and it will bounce back. Some segments suffered while some did well. The premium and super-premium segment has actually done well. While due to barriers in drinking at home, the middle -class segment has declined,”he said.
Regarding the home-delivery of alcohol, Banerji feels that comprehensive regulations and safeguards are necessary to prevent abuse. He also is of the view that increase in excise duty is not a sensible thing to do in a pandemic time.
The alcobev company had supply chain issues during the last one year due to disruptions in labour.
“Kyndal will focus on our existing business and supply chains rather than introducing new brands. We grew by about 10-15% even during the pandemic because we operate in the premium and super-premium segment. Our southern business is bit choppy, while we grew in Maharashtra, Goa ,Delhi ,Haryana and Punjab,” he said. The liquor maker is betting big on scotch whisky and premium rum in the Indian market.