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Liquor

The pricier the booze, the faster it sells as India's wealth grows

Bloomberg|
On the house
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On the house

One recent Saturday evening in Mumbai, men in bespoke jackets and women wearing summer dresses sampled artisanal gins, French brandy and Caribbean rum at an airy, modern bar built on the grounds of a colonial-era horse racing club. With a jazz bass thumping in the background, a small group of the curious gathered to hear a maroon-suited employee of French-distiller Pernod Ricard SA—flown in from the Scottish highlands—hold forth on the primacy of Scotch whisky.

Reuters
Growing mania
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Growing mania

The luxury spirits festival, the first organised by a local importer, is the latest manifestation of India’s growing mania for the top shelf (despite longstanding official measures to curb drinking). Pernod reported 24 per cent growth in India last quarter, with its imported Scotch brands leading the way. Rival Diageo reported 12 per cent revenue growth, largely driven by such prestige brands as Johnnie Walker whisky. India’s growing thirst for high end liquor goes well beyond the Mumbai glitterati. Diageo says even tipplers of the local moonshine are skipping mid-tier foreign alcohol and jumping right into premium spirits.

Agencies
Worth a shot
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Worth a shot

After years of muted growth, foreign distillers are seeing sales rebound as the industry recovers from 2017 ban on some liquor sales that has since eased and a currency ban in 2016 that aimed to crack down on the underground economy. Sale of Diageo’s “prestige brands” and premium labels rose 17 per cent in the first half of the 2019 fiscal year compared with a 7 per cent climb for fiscal 2017, according to the latest company data.

Agencies
In good spirits
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In good spirits

It's a sign of how quickly high-end booze has spread as an important marker of the good life in traditionally teetotaling India, and a key driver in the 25 per cent growth Euromonitor forecasts will take the country’s spirits market to Rs 2.92 lakh crore ($41 billion) by 2022.

AFP
From culture to a taboo
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From culture to a taboo

Spirits have been a part of Indian culture since ancient times, notably in the form of an alcohol distilled from molasses, byproduct of the subcontinent’s abundant sugarcane, known locally as country liquor or ' desi daru'.

After India freed itself from British rule in 1947, however, drinking became something of a taboo as that generation and those born right after followed the example of Independence hero Mahatma Gandhi, who abstained from alcohol himself and decried it as a social evil. Gujarat, where 'Bapu' was born, is a dry state to this day, along with two more. And in most other states alcohol is subject to taxation that can go as high as 200 per cent for local versions of foreign liquor and 150 per cent for imports. That’s partly why India has one of the world’s lowest per capita rates of alcohol consumption.

Reuters
'Prestige and above'
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'Prestige and above'

Diageo says people of modest means who typically drink country liquor may splash out for a lower level premium brand such as McDowell’s No. 1 to mark a special occasion. Once Indians start upgrading, Diageo’s data suggests they keep going as their incomes rise and palettes refine.

The company says its “prestige and above” category grew 16 per cent last quarter and now accounts for about 66 per cent of its business in India. And when Diageo further divides that segment into products that are more and less premium, the growth picks up the more premium a product gets.

AFP
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