Liquor manufacturing, distribution and retailing in India came to a complete standstill during the nationwide lockdown from March 25 to May 3 and led to a 17% decline in net sales in the country during the year ended June. While there has been a phased re-opening of the off-trade since May, the on-trade channel - bars, pubs and restaurants - remains closed.
Impairment charges are taken when the value of assets or goodwill is no longer fully recoverable or their ability to generate cash falls due to a change in legal or economic circumstances or as the result of a casualty loss from unforeseen hazards.
World's leading spirits maker Diageo has taken a write down of 1.3 billion pound, including an impairment of 772 million pound for the Indian market, reflecting the impact of COVID-19 and challenging trading conditions.
Many state governments, which had noted their revenues plummet amid the lockdown to contain the Covid-19 pandemic, had increased tax on alcohol by up to 75% of maximum retail price to boost their coffers since the Centre allowed reopening of liquor shops in the first week of May.
Till now, only low-priced Indian Made Foreign Liquor (IMFL) was available in paperboard cartons akin to ‘tetrapaks’, which has helped companies and state governments tackle illicit liquor trade in India.
While consumption of alcohol is not taboo in most Indian households, the habit of stocking beer in a family fridge is not routine. Its shorter shelf life compared to hard spirits has seen demand shrink.
This is not the first time a beer maker has diversified into fashion apparel to build its brand in a market where liquor advertising is banned and at a time when both apparel and beer market have shrunk after prolonged closure of outlets that sell them amid the Covid-19 outbreak in the country.
The country's biggest spirits firm have expanded the definition of ‘family’ to include ‘same sex’ and ‘live in’ partners and said the new policy will apply to all employees regardless of sexual orientation, gender identity or expression including lesbian, gay, bisexual, and transgender or LGBT.
"During the search operation, it was gathered that during the COVID-induced lockdown SDPL had also manufactured alcohol-based hand sanitizers which may have been removed clandestinely without payment of Goods and Service Tax (GST) at the rate of 18 per cent," a statement said.
Impressario Handmade Restaurants managing director Riyaaz Amlani, owner of Social, Smoke House Deli and Mocha said while the curfew guidelines by MHA are 'understandable', restrictions on serving alcohol in restaurants which have licenses is further killing the industry.