CIABC says hike will disrupt the market, erode competitiveness of national brands
May lead to dumping from neighbouring States
The Maharashtra cabinet, chaired by Chief Minister Devendra Fadnavis, on June 10 approved the Excise Department’s proposal to increase duties on Indian Made Foreign Liquor (IMFL), country liquor and also premium liquor brands. The hike in excise duties is expected to boost the coffers of the state government by about Rs. 14,000 crore.
As per the announcement, the excise duty on IMFL (with a declared production cost up to ₹260 per bulk litre) from 3% to 4.5% of the production cost. The excise duty on country liquor will go up from Rs.180 to Rs. 205 per proof litre. The premium foreign liquor brands have seen the most hike, with a new rate set to bring the minimum retail price to Rs 360.
The Cabinet also approved the department’s proposal to introduce a category ‘Maharashtra Made Liquor’ (MML) to include grain-based spirits produced by local manufacturers. The idea behind this proposal, it said, was to encourage local manufacturing. The MML manufacturers are required to register their brands under the ‘MML’ category.
The excise department had formed a high-level study group which toured other states to understand the excise policies, the distillery operations, distribution etc and recommend the best for Maharashtra. Going by the recommendations, the department has also approved the creation of an integrated control unit powered by Artificial Intelligence (AI) to monitor distilleries, liquor manufacturers, and wholesale vendors. Additionally, a restructured administrative framework for the department has been sanctioned, which includes the offices of the Additional Superintendent for Mumbai Suburban, Thane, Pune, Nashik, Nagpur, and Ahilyanagar districts.
The Chief Minister’s office said “These reforms are a result of an extensive review of excise policies in other states which focused on tax structures, licensing efficiency, and measures to combat evasion. The objective of the new policy is not only to boost state revenue but also to curb illicit trade and foster a more transparent and regulated liquor market across Maharashtra.”
Revised minimum retail prices
The state government has issued the revised minimum retail prices for 180 ml bottles.
The Cabinet has also approved reforms in liquor licensing:
Sealed Foreign Liquor Sale Licenses (FL-2) and Hotel/Restaurant Licenses (FL-3) can now be operated on a lease basis (Conducting Agreement)
An additional annual fee of 15% for FL-2 and 10% for FL-3 licenses will be charged
To support these changes and ensure effective implementation, the Cabinet has sanctioned the creation of 1,223 new posts, including 744 new positions and 479 supervisory roles in the State Excise Department.
These comprehensive reforms are part of the government’s broader strategy to strengthen the department and increase revenue through systematic regulation of the liquor trade.
It must be mentioned that the state is facing a financial crunch due to the implementation of many welfare schemes particularly the ‘Ladli Bahin Yojana’ which pays eligible women Rs. 1,500 per month.
The state government is expected to table the relevant bill during the upcoming session of the state legislature.
Presently, it is said that Karnataka levies the highest liquor taxes in the country, with an 83 per cent cess on the actual price. In addition, the state government introduced a 5 per cent additional excise duty on certain products last month. As a result, Bengaluru has become the most expensive metro city for alcohol in India.
In neighbouring Telangana, the state government in May issued an order raising the retail price of select liquor brands by ₹10 for a quarter bottle (180 ml), ₹20 for a half bottle (360 ml), and ₹40 for a full bottle (750 ml).
Almost all the states, barring those having prohibition, treat the liquor industry as the cash cow and keep raising taxes as and when the government is in need of funds.
CIABC Opposes Steep Increase in Excise Duty on IMFL
Expressing grave concern over steep increase in Excise Duty on IMFL by up to 50% by the Maharashtra Government, the Confederation of Indian Alcoholic Beverage Companies (CIABC) has urged the state government to rethink and reconsider such a huge hike as it could trigger serious consequences. The CIABC has urged the state government to immediately hold deliberations with all stakeholders “to arrive at a balanced, data-driven, and sustainable course of action that protects both revenue interests and the long-term viability of the IMFL sector in Maharashtra”.
Stating that the CIABC has already written to the Maharashtra government urging to start a consultative process with all stakeholders before releasing any final gazette notification, Mr Anant S Iyer, Director General of the apex body of the Indian Alcoholic Beverage Industry, underlined that this steep hike in excise is projected to push Maximum Retail Prices (MRPs) up by as much as 85%, a step that could severely disrupt the market, erode the competitiveness of national brands, and jeopardize the availability of legitimate alcoholic beverages in Maharashtra.
“Such an unprecedented escalation in duties poses a serious deterrence to consumer access of established and reputed brands, compelling a shift toward lower-category products. This poses a serious threat to the stability of the IMFL industry in the State…such a move will have a far-reaching adverse impact,” Mr Iyer said in a statement.
The hike, he said, would lead to a steep and abrupt increase in MRPs (maximum retail price), destabililsing consumer accessibility and purchasing power, particularly within the mass-market segment which caters to the common man. This will lead to a significant drop in legal sales volumes, overlooking the interest of industry and its substantial investment in the state. It will also endanger the employment of people engaged in the entire value chain from farm to consumer.
Mr Iyer warned that higher MRPs often create a vacuum filled by illegal operators. Past experiences show that pricing arbitrage fosters regional imbalances, encouraging the spread of illicit and unsafe liquor and counterfeits of popular brands—posing a major public health risk and leading to further revenue leakage.
Porous Borders, may lead to Dumping
Noting that this move will also result in increased stock dumping from neighbouring states, the CIABC DG said Maharashtra shares borders with states that are porous. These states have similar brands which have lower MRPs for IMFL. Any additional price escalation will trigger large-scale dumping (exfiltration) from these states, resulting in illicit inflows that damage legitimate trade and erode the State’s tax base. Maharashtra has always ensured minimal impact of such occurrences by ensuring competitive pricing vide neighbouring states till now.
Mr Iyer further said the retail price structure must align with consumer affordability. The proposed price increase risks shifting consumers toward lower-tax categories, undermining premium and mid-tier segments. Such behavioural shifts could dilute revenue contributions from higher-margin IMFL products.
IMFL Accounts for 60% of Excise Revenue
The IMFL industry contributes approximately 60% of the total Excise Revenue of the State. Furthermore, the Excise Duty collected from a single case of IMFL is equivalent to that from four cases of beer, underscoring the critical importance of this category. Duty increase on IMFL, without corresponding changes for a category such as beer will create an uneven playing field and distort category dynamics leading to possible adverse impact on revenue. The CIABC has highlighted to the Maharashtra government that while the intent behind the proposed hike may be to enhance revenue collections by Rs.14,000 crore, the actual outcome may be contrary- driven by declining sales, rising illicit trade, and border leakages. The long-term impact could be deeply detrimental, not only for industry and employment, but also for public safety and overall state revenues.
• Prime Minister, Narendra Modi calls the pact ‘historic milestone’
• UK Prime Minister, Keir Starmer believes it would strengthen alliances and reduce trade barriers
• Scotch whisky and gin tariff reduced from 150% to 75%
• Indian alcobev industry hopes ‘minimum import price’ and non-tariff barriers are addressed
• Radico Khaitan to import `250 crore worth of Scotch in Fiscal Year 2025-26, expects substantial cost-benefit
After protracted negotiations from January 2022, India and the United Kingdom finally signed the ‘Free Trade Agreement’ on April 6. The Indian Prime Minister, Narendra Modi has termed it as a ‘historic milestone’, while his UK counterpart Sir Keir Starmer said that strengthening alliances and reducing trade barriers with economies around the world is part of their ‘Plan for Change’ to deliver a stronger and more secure economy.
The FTA signing announcement came following a telephonic conversation between Prime Minister Modi and his UK counterpart Starmer. The pact was signed in London by the Indian Commerce Minister, Piyush Goyal and the UK Trade Secretary, Jonathan Reynolds. The FTA covers 90% of tariff lines and includes tariff cuts on Scotch whisky, gin, automotive exports, medical devices, and machinery.
Scotch Whisky Tariff Halved
The Scotch whisky industry has been seeking reduction in tariff and that has been halved from 150% to 75% at entry into force, following to 40% after 10 years.
It must be mentioned here, recently India had reduced the tariff on American whiskey (bourbon) from 150% to 100%. India is likely to see now more of imported whiskies, predominantly Scotch as Indians love the dram.
Automotives down from 100% to 10%
The UK Department for Business and Trade (DBT) said that besides whisky and gin, tariff reductions have also been achieved on products such as medical devices, advanced machinery and lamb. Automotives has had the biggest tariff reduction from 100% to 10%. DBT said that the reduction of tariffs would be worth over 400 million pounds based on 2022 trade statistics and is expected to double to 900 million pounds by 2035.
“By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North-East to whisky distilleries in Scotland,” said Trade Secretary Reynolds.
PM Modi’s Tweet
Prime Minister Modi
Prime Minister Modi tweeted “Delighted to speak with my friend PM Keir Starmer. In a historic milestone, India and the UK have successfully concluded and ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention. These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon.”
Both agreed that the landmark agreements between the two big and open market economies of the world will open new opportunities for businesses, strengthen economic linkages, and deepen people-to-people ties.
The two leaders agreed that expanding economic and commercial ties between India and the UK remain a cornerstone of the increasingly robust and multifaceted partnership. The conclusion of a balanced, equitable and ambitious FTA, covering trade in goods and services, is expected to significantly enhance bilateral trade, generate new avenues for employment, raise living standards, and improve the overall well-being of citizens in both countries. It will also unlock new potential for the two nations to jointly develop products and services for global markets. This agreement cements the strong foundations of the India-UK Comprehensive Strategic Partnership, and paves the way for a new era of collaboration and prosperity.
PM Starmer
The talks between the two nations have been going on since January 2022 and the signing gains importance in the backdrop of the tariff war initiated by the US President Donald Trump. Between 2022 and now, Britain has seen four different Prime Ministers, including the previous PM Rishi Sunak, involved in the negotiations.
INDUSTRY REACTIONS
Sudden and steep reduction, impacts Indian alcobev sector: Deepak Roy
Deepak Roy
However, the Confederation of Indian Alcoholic Beverage Companies (CIABC) while welcoming the cut in tariffs said it should have been gradual.
The Chairman of CIABC, Deepak Roy said the reduction from 150 to 75% is ‘sudden and steep’ which should have been gradual as the Indian alcobev sector is going through difficult times, besides operating in a highly regulated market.
“The Indian single malts, the gins and others are doing well, but we needed another couple of more years to make them really competitive in the global market.”
He said CIABC is hoping that non-tariff barriers are addressed in the FTA. “We had proposed a minimum import price of 50 to 75$ per case to ensure that there is no dumping of cheap and unknown products.”
Roy added that it was time for some of the State Governments to withdraw the excise duty concessions given to multinational corporations. “There should not be any difference and there should be a level playing field.”
While stating “We are not against any tariff reduction. The Indian industry is ready to compete with the global best and they are holding their own. Only thing, we do not want unknown cheap brands coming and killing the industry here which is providing substantial revenues to the State governments.”
CIABC hopes for ‘Minimum Import Price’: Anant Iyer
Anant S. Iyer
The Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), Anant S. Iyer said, “Though FTA details are still awaited, from what information we have gathered it seems that the Government has not fully heeded to the pleas of the Indian alcoholic beverage industry.
We have always been asking for a level-playing field for the Indian players. We only hope that the government has included in the FTA the minimum import price (MIP) which will prevent dumping / under invoicing and also the removal of non-tariff barriers to ensure better international market access to Indian alcoholic beverages.
“We fear that if the same template of duty reduction is followed for the trade deals with the EU, the US and other nations which produce spirits and wines, then the Indian Alcobev industry, including the wine sector, could get adversely impacted.”
CIABC has urged the Government of India, as pointed out earlier also to various states such as Maharashtra, Kerala, Odisha, Rajasthan, Madhya Pradesh etc., to review the excise concessions given to imported liquor, both spirits and wines. “The governments should make them equal to that of IMFL / Indian wines. This discrimination should end immediately.”
He added, “The government is looking to touch $1 billion exports from the Indian Alcobev industry by 2030. However, without ensuring proper market access especially to the Western nations, it will be difficult to meet the export target. While the other sectors might be benefitting from the FTA, the Indian Alcobev industry seeks similar benefit. Though Indian whiskies, rum and gins have been winning accolades globally, without removal of non-tariff barriers and granting of market access it will be difficult for the Indian Alcobev sector to meet the export target.”
Suntory’s Neeraj Kumar calls its ‘pivotal development’
Neeraj Kumar
Neeraj Kumar, Managing Director, Suntory Global Spirits India terming it a ‘historic milestone’, welcomed the decision to reduce tariffs on whisky and gin. “This is a pivotal development that will improve access, affordability, and consumer choice in India. It also marks a positive step in strengthening bilateral trade ties and fostering an environment for enhanced investment, innovation, and growth. The team at Suntory Global Spirits looks forward to unlocking new opportunities for collaboration and growth across both markets.”
Positive Shift for India’s Alcobev Sector: Abhishek Khaitan
Abhishek Khaitan
The Managing Director of Radico Khaitan, Abhishek Khaitan while extending his congratulatory messages to the Prime Minister and the Minister of Commerce said, “This is a welcome move that signals a positive shift for India’s alcobev sector, particularly for companies on a premiumisation journey and those which are producing world-class spirits.
“As the largest importer of Scotch whisky for blending, Radico sees significant potential for cost advantages through the expected reduction in customs duties. Radico plans to import scotch malt worth ₹250 CR in fiscal year 2025-2026, and this treaty therefore benefits us substantially.
“Overall, this agreement creates a win-win opportunity for Indian companies striving to take India to the global stage with excellence and innovation.”
Hope Indian Single Malts will not dilute premium image: Amar Sinha
Amar Sinha
The Chief Operating Officer of Radico Khaitan, Amar Sinha termed it as a ‘landmark’ pact that was ‘long overdue’.
“India is transforming and we as a country are producing world class spirits and constantly upgrading our quality. To produce this quality of spirit, obviously we need to import spirits for blending which India does so far as vatted malt Scotch is concerned from Scotland.
“Radico as a company are the largest importers of vatted malt Scotch. This fiscal year 2025-26, Radico plans to import scotch worth ₹250 crores. With this FTA, Radico is going to get substantial benefit on the cost front which will make the company healthier and more profitable. So, we personally think as a company that it’s a great agreement and it will offer great opportunities for Indian companies to continue their premiumisation drive and keep reducing their cost.”
Sinha, however, added, “As far as Indian single malts (ISM) are concerned Radico produces ISM which are today acknowledged as one among the top 10 spirits of the world. Rampur ISM is one among top whiskies from India. We have priced our product pretty high and we believe in pricing our product much higher than what competition does. So, we are not weary of the fact what the competition does to its price. We feel that competition if it reduces price, they will be diluting the image of their premium brand, therefore we don’t think they will reduce price. It would be an opportune moment for foreign companies to make some money through this tax reduction.”
It is a very welcome move and a win-win situation for the UK as well as India, he said and added that the demand of India to look into non-tariff barriers is genuine. “We are waiting for the fine print of the FTA, before that it is difficult to comment.”
‘Short-term impact’ on Indian products: Paul John
Paul. P. John
The Chairman of John Distilleries, Paul. P. John while welcoming the FTA said, “We believe this to be a significant step towards strengthening bilateral trade and economic cooperation between the two countries. This may have a short term impact on Indian products however we are confident about the quality of our products. We also hope that that this deal will allow better ease of business for Indian products in the UK. It is also crucial to ensure that both nations maintain a level playing field, safeguarding the interests of domestic industries and promoting fair competition.”
Three-year maturation period contentious issue: Vinod Giri
Vinod Giri
The Director General of Brewers Association of India, Vinod Giri who has championed the cause of the spirits industry earlier, said, “We are yet to see what India gets in return and how the non-tariff issues are handled – especially the condition of three-year maturation to qualify as whisky and measures to prevent predatory pricing.
“In terms of impact Scotch makers are expected to improve their margins first by adjusting duty savings in invoice prices and if that happens, market dynamics will remain unchanged in short terms. Companies importing raw material for blending with domestic whiskeys in India will make some savings on cost.
“The most important long-term impact will be on BII (bottled in India) category. As duties start falling, the rationale for that segment will go away.”
About 30% reduction in retail price, avers Ajay Srivastava
Ajay Srivastava
Ajay Srivastava, the Founder of Global Trade Research Initiative and who was earlier part of negotiations with Australia said, “it’s a good decision and trade would increase between the two countries across sectors.”
While stating that as details of the FTA were still not available it would ‘difficult to hazard a guess’ on what the minimum import price would be, Srivastava said but added that “it will only be on the higher side, unlike wine which is around 4 dollars. Scotch always sells at a premium.”
Srivastava said the question that needs to be asked is how much would be the retail price be following the duty reduction. Giving a hypothetical scenario, he said if a bottle of Scotch whisky is 100$ and the duty at 150% and average State government duties is 60%, the consumer will be buying at $400. Now with the tariff halved from 150 to 75%, the consumer will pay 275$ which is almost 30% reduction. It is a good deal and people are anyways willing to pay for Scotch.”
On whether the Indian spirits market would be impacted, Srivastava asked “Is any Indian company producing Scotch. Nobody is in the bulk business. The Indian single malt is a niche market and does not compete with Scotch. Yes, Indians love Scotch.” However, he added that the Indian alcohol sector has to further develop and this would help in doing so.
He said the FTA would open the flood gates to Europe seeking reduction in tariff on wines, maybe up to 50%.
Sanjiv Puri, Regional Director (India), Angus Dundee Distilleries
Sanjiv Puri
The proposed Free Trade Agreement (FTA) between India and the United Kingdom marks a significant milestone in strengthening bilateral trade and investment ties. For Angus Dundee Distillers, this development presents a promising opportunity to enhance our presence in one of the world’s fastest-growing spirits markets.
India’s burgeoning middle class, evolving consumer preferences, and growing appreciation for premium Scotch whisky align well with our commitment to delivering high-quality, authentic Scottish products. A well-negotiated FTA could lead to reduced tariffs and streamlined regulatory procedures, addressing long-standing market access barriers that have limited the full potential of Scotch exports to India.
Currently, imported Scotch whisky faces a high customs duty of 150% in India, which restricts competitiveness and volume growth. A phased reduction in tariffs under the FTA would not only make premium Scotch more accessible to Indian consumers but also support local economic activity through increased trade, investment in distribution, and brand development.
For Angus Dundee, a family-owned independent company with a long-standing tradition of quality and integrity, this FTA offers a platform to expand responsibly, collaborate with Indian partners, and contribute meaningfully to the India-UK trade corridor.
We look forward to the successful conclusion of the agreement and are optimistic about its potential to unlock mutual growth and value for both countries.
ISWAI believes premiumisation will get further boost
The CEO of International Spirits and Wines Association (ISWAI), Sanjit Padhi said, “We anticipate that this will accelerate the ongoing trend of premiumisation within the alcobev sector, positively impacting the exchequer revenues of Indian states. Cheaper prices may also result in premiumisation. India’s increasingly aspirational and discerning consumers will now have access to premium international brands at more accessible prices.”
Pegs on enhanced consumer experience
Suresh Menon
The Adviser (Tax and Regulatory Affairs) of ISWAI, I.P. Suresh Menon said, “ISWAI and its members welcome the UK-India Free Trade Agreement as a landmark development for the Alcobev sector. The reduction in tariffs offers significant strategic benefits for both countries. India’s increasingly aspirational and discerning consumers will now have access to premium international brands at more accessible prices. This enhanced choice will elevate the consumer experience and boost growth across related sectors such as tourism and hospitality.
“We anticipate that this will accelerate the ongoing trend of premiumisation within the Alcobev sector, positively impacting the exchequer revenues of Indian states. We see this agreement as a win-win for all stakeholders in the spirits sector whilst fuelling trade, attracting investment, and fostering the exchange of best practices. It reflects the shared commitment of India and the UK to deepening economic ties and advancing fair, balanced trade.”
RV Subramanian, Director, Ian Macleod Distillers India Pvt Ltd
RV Subramanian
The UK India FTA is a long-awaited trade deal covering wide range of goods and services between two countries. The most important one among the items is Scotch whisky, the proposed duty reduction of 75% from present level of 150% is a welcome move and this will benefit all stakeholders – the Governments (Centre and States), Scotch whisky companies and Consumers.
India being a predominantly whisky market, the customs duty reduction would expand the market for Scotch whisky, which is currently less than 2% of total Indian whisky market.
It is to be seen whether the states are increasing excise duty and other levies on imported bottled spirits.
It is difficult to predict now, whether consumer will get the benefit of customs duty reduction from 150% to 75% on Scotch whisky, much will depend on the State Excise and Brand owning companies.”
Scotch Whisky Association calls its ‘once in a generation deal’
While the Indian alcobev sector is still hoping for a ‘level playing field’, the distilleries in Scotland are more than happy.
The Chief Executive of the Scotch Whisky Association, Mark Kent calling it a “transformational” deal said, “The UK-India free trade agreement is a once in a generation deal and a landmark moment for Scotch Whisky to the world’s largest whisky market.
“The reduction of the current 150% tariff on Scotch Whisky will be transformational for the industry. The deal has the potential to increase Scotch Whisky exports to India by £1bn over the next five years and create 1200 jobs across the UK. The deal is good for India too, boosting federal and state revenue by over £3bn annually, and giving discerning consumers in a highly educated whisky market far greater choice from SME Scotch Whisky producers who will now have the opportunity to enter the market.
“This agreement shows that the UK government is making significant progress towards achieving its growth mission, and the negotiating teams on both sides deserve huge credit for their dedication. The Scotch Whisky industry looks forward to working with the UK and Indian governments in the months ahead to implement the deal which would be a big boost to two major global economies during turbulent times.”
Chivas Brothers CEO terms it ‘game-changer’
Jean-Etienne Gourgues
Jean-Etienne Gourgues, Chivas Brothers Chairman and CEO, said the FTA is a “welcome boost for Chivas Brothers during an uncertain global economic environment.”
He said “India is the world’s biggest whisky market by volume and greater access will be a game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine’s. The deal will support long term investment and jobs in our distilleries and bottling plants in Scotland, as well as help deliver growth in both Scotland and India over the next decade. Slàinte (meaning cheers in Irish) to the UK Ministers and officials who steered the deal though long negotiations.”
Chivas Brothers Ltd. which is part of the Pernod Ricard group of companies, exports over £2bn of Scotch whisky and gin every year, including brands like Chivas Regal, Ballantine’s, The Glenlivet and Beefeater. India is amongst Chivas Brothers’ largest export markets and the biggest consumer of whisky worldwide by volume. The UK-India trade agreement will help solidify and potentially expand on Pernod Ricard’s existing investments, which includes a €200m distillery construction in the Indian state of Maharashtra and £100m in bottling facilities in Dumbarton, Scotland.
Quality and choice will increase across India: Debra Crew
Debra Crew
Diageo Chief Executive Debra Crew said, “The UK-India Free Trade Agreement is a huge achievement by Prime Ministers Modi and Starmer and Ministers Goyal and Reynolds, and all of us at Diageo toast their success. It will be transformational for Scotch and Scotland, while powering jobs and investment in both India and the UK.
“The deal will also increase quality and choice for discerning consumers across India, the world’s largest and most exciting whisky market. Diageo is a global leader in beverage alcohol with a collection of brands across spirits and beer categories sold in more than 180 countries around the world. These brands include Johnnie Walker, Crown Royal, J&B and Buchanan’s whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.”
The Managing Director and CEO of Diageo India (USL), Praveen Someshwar
While congratulating the leaders for the historic agreement said, “The landmark treaty will enable improved accessibility and choice of scotch for the Indian consumers, the largest and the most exciting whisky market.”
Diageo is a leading player in India’s beverage alcohol sector and is among the top 10 fast-moving consumer goods companies in India by market capitalisation. Diageo has 35 manufacturing facilities across India, employs over 3,300 people directly in market with a further 100,000 jobs supported throughout its value chain. India is one of Diageo’s largest markets globally and accounts for almost half of its total global spirits volume.
Better access to global premium spirits: Sachin Mehta, William Grant & Sons
Sachin Mehta
Sachin Mehta, Managing Director – India of William Grant & Sons India Pvt. Ltd. Said, “This will enable much better access to global premium spirits to India’s growing discerning consumers. This enhanced choice will allow acceleration of the ongoing trend of premiumisation within high-end spirits, not only elevating the Indian consumers experience, but also benefitting the overall industry, trade, exchequer, and related sectors or travel, tourism, and hospitality. We are committed to provide access and choice of world-class brands of our global portfolio to the Indian consumers.”
‘Over the Moon’: Karan Billimoria
Karan Billimoria
Karan Billimoria, Chair of the International Chamber of Commerce, UK, Founder of Cobra Beer and Member, House of Lords, UK Parliament said he was ‘over the moon about the UK-India Free Trade Agreement’.
Calling from the UK, he said, “Negotiations started when I was President of the Confederation of British Industry (CBI) in early 2022 and they have concluded over three years later, whilst I am Chair of the International Chamber of Commerce (ICC) UK.
“India is the fastest growing major economy in the world and this year will become the fourth largest economy globally. In spite of this, India is only the 11th largest trading partner of the UK; it should be one of the handful of largest trading partners.
“I believe this FTA will be a catalyst for bilateral trade, business and investment between the UK and India and will turbocharge bilateral trade in goods and services from the current level of £42 billion to more than double at over £80 billion within the next five years.
“India has historically been a high tariff country, with the extreme being the tariff imposed on Scotch whisky at 150%. Thanks to this FTA, this will halve to 75% and decrease to 40% over the next decade. Scotch whisky exports are, as a result, expected to increase by £1 billion.
“I am hoping that this FTA combined with an investment agreement will also help to increase bilateral investment between the two countries. We already have the examples of Tata investing in Jaguar Land Rover and Tata Steel in the UK, and JCB investing hugely in India over the past decades. Similarly, I am confident that there will be large investments by British alcobev companies in India over the coming years.”
As per draft notification the annual license fee has been increased from ₹27 lakh to ₹54 lakh
For distilleries and warehouses, it has been increased from ₹45 lakh to ₹90 lakh
Distilleries and liquor shops in Karnataka are up in arms against the Karnataka Government which has been raising excise duty and license fees at regular intervals. As a mark of protest, they have called for a strike on May 21 and retailers have decided not to purchase liquor from government depots.
On May 15, yet again, the Karnataka government issued a draft notification to double the license fee on May 15. Organisations such as the Karnataka Wine Merchants Association, the National Restaurant Association of India, and the Karnataka Brewery and Distilleries Association have opposed this move and have given a call to all liquor vends in the state to close on May 21. They said across the State almost 12,000 licensed liquor shops will down the shutters.
According to the draft notification the annual license fee has been increased from ₹27 lakh to ₹54 lakh. For distilleries and warehouses, it has been increased from ₹45 lakh to ₹90 lakh. The new fees will come into effect from July 1.
The associations said the repeated hikes by the government had rendered the business unviable, leading to closure of many liquor shops.
The Congress-I government has been increasing excise, milk prices, flat registration charges etc. as to fund the many freebies it announced during the elections. Excise officials say that the fee was increased this year to make up for the shortfalls of the previous financial year. The revenue target for the financial year 2024-25 was 38,525 crores. But only 35,530 crores could be collected. Retailers said the new license fee hike will hit budget segment sales and small outlets. They said that nearly 40 pubs in Bengaluru closed last year as doing business was becoming difficult.
Prime Minister, Narendra Modi calls the pact ‘historic milestone’
UK Prime Minister, Keir Starmer believes it would strengthen alliances and reduce trade barriers
Scotch whisky and gin tariff reduced from 150% to 75%
Indian alcobev industry hopes ‘minimum import price’ and non-tariff barriers are addressed
Radico Khaitan to import ₹250 crore worth of Scotch in Fiscal Year 2025-26, expects substantial cost-benefit
After protracted negotiations from January 2022, India and the United Kingdom finally signed the ‘Free Trade Agreement’ on April 6. The Indian Prime Minister, Narendra Modi has termed it as a ‘historic milestone’, while his UK counterpart Sir Keir Starmer said that strengthening alliances and reducing trade barriers with economies around the world is part of their ‘Plan for Change’ to deliver a stronger and more secure economy.
The FTA signing announcement came following a telephonic conversation between Prime Minister Modi and his UK counterpart Starmer. The pact was signed in London by the Indian Commerce Minister, Piyush Goyal and the UK Trade Secretary, Jonathan Reynolds. The FTA covers 90% of tariff lines and includes tariff cuts on Scotch whisky, gin, automotive exports, medical devices, and machinery.
Scotch Whisky Tariff Halved
The Scotch whisky industry has been seeking reduction in tariff and that has been halved from 150% to 75% at entry into force, following to 40% after 10 years.
It must be mentioned here, recently India had reduced the tariff on American whiskey (bourbon) from 150% to 100%. India is likely to see now more of imported whiskies, predominantly Scotch as Indians love the dram.
Automotives down from 100% to 10%
The UK Department for Business and Trade (DBT) said that besides whisky and gin, tariff reductions have also been achieved on products such as medical devices, advanced machinery and lamb. Automotives has had the biggest tariff reduction from 100% to 10%. DBT said that the reduction of tariffs would be worth over 400 million pounds based on 2022 trade statistics and is expected to double to 900 million pounds by 2035.
“By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North-East to whisky distilleries in Scotland,” said Trade Secretary Reynolds.
PM Modi’s Tweet
Prime Minister Modi tweeted “Delighted to speak with my friend PM Keir Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention. These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon.”
Both agreed that the landmark agreements between the two big and open market economies of the world will open new opportunities for businesses, strengthen economic linkages, and deepen people-to-people ties.
The two leaders agreed that expanding economic and commercial ties between India and the UK remain a cornerstone of the increasingly robust and multifaceted partnership. The conclusion of a balanced, equitable and ambitious FTA, covering trade in goods and services, is expected to significantly enhance bilateral trade, generate new avenues for employment, raise living standards, and improve the overall well-being of citizens in both countries. It will also unlock new potential for the two nations to jointly develop products and services for global markets. This agreement cements the strong foundations of the India-UK Comprehensive Strategic Partnership, and paves the way for a new era of collaboration and prosperity.
The talks between the two nations have been going on since January 2022 and the signing gains importance in the backdrop of the tariff war initiated by the US President Donald Trump. Between 2022 and now, Britain has seen four different Prime Ministers, including the previous PM Rishi Sunak, involved in the negotiations.
Sudden and steep reduction, impacts Indian alcobev sector: Deepak Roy
However, the Confederation of Indian Alcoholic Beverage Companies (CIABC) while welcoming the cut in tariffs said it should have been gradual.
The Chairman of CIABC, Deepak Roy said the reduction from 150 to 75% is ‘sudden and steep’ which should have been gradual as the Indian alcobev sector is going through difficult times, besides operating in a highly regulated market.
“The Indian single malts, the gins and others are doing well, but we needed another couple of more years to make them really competitive in the global market.”
He said CIABC is hoping that non-tariff barriers are addressed in the FTA. “We had proposed a minimum import price of 50 to 75$ per case to ensure that there is no dumping of cheap and unknown products.”
Roy added that it was time for some of the State Governments to withdraw the excise duty concessions given to multinational corporations. “There should not be any difference and there should be a level playing field.”
While stating “We are not against any tariff reduction. The Indian industry is ready to compete with the global best and they are holding their own. Only thing, we do not want unknown cheap brands coming and killing the industry here which is providing substantial revenues to the State governments.”
CIABC hopes ‘Minimum Import Price’, inter-alia, is factored in
The Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), Anant S.Iyer said, “Though FTA details are still awaited, from what information we have gathered it seems that the Government has not fully heeded to the pleas of the Indian alcoholic beverage industry.
“We have always been asking for a level-playing field for the Indian players. We only hope that the government has included in the FTA the minimum import price (MIP) which will prevent dumping / under invoicing and also the removal of non-tariff barriers to ensure better international market access to Indian alcoholic beverages.
“We fear that if the same template of duty reduction is followed for the trade deals with the EU, the US and other nations which produce spirits and wines, then the Indian Alcobev industry, including the wine sector, could get adversely impacted.”
CIABC has urged the Government of India, as pointed out earlier also to various states such as Maharashtra, Kerala, Odisha, Rajasthan, Madhya Pradesh etc., to review the excise concessions given to imported liquor, both spirits and wines. “The governments should make them equal to that of IMFL / Indian wines. This discrimination should end immediately.”
He added, “The government is looking to touch $1 billion exports from the Indian Alcobev industry by 2030. However, without ensuring proper market access especially to the Western nations, it will be difficult to meet the export target. While the other sectors might be benefitting from the FTA, the Indian Alcobev industry seeks similar benefit. Though Indian whiskies, rum and gins have been winning accolades globally, without removal of non-tariff barriers and granting of market access it will be difficult for the Indian Alcobev sector to meet the export target.”
Radico Khaitan says ‘Win-win’, sees cost-benefit in its imports
The Chief Operating Officer of Radico Khaitan, Amar Sinha while welcoming the FTA has congratulated the Prime Minister, Narendra Modi and the Minister of Commerce, Piyush Goyal for concluding the ‘landmark’ pact. “It was long overdue.”
“India is transforming and we as a country are producing world class spirits and constantly upgrading our quality. To produce this quality of spirit, obviously we need to import spirits for blending which India does so far as vatted malt scotch is concerned from Scotland.”
Radico as a company are the largest importers of vatted malt scotch. This fiscal year 2025-26, Radico plans to import scotch worth ₹250 crores. With this FTA, Radico is going to get substantial benefit on the cost front which will make the company healthier and more profitable. So, we personally think as a company that it’s a great agreement and it will offer great opportunities for Indian companies to continue their premiumisation drive and keep reducing their cost.”
Indian Single Malts should not dilute the premium image
Sinha added “As far as Indian single malts (ISM) are concerned Radico produces ISM which are today acknowledged as one among the top 10 spirits of the world. Rampur ISM is one among top whiskies from India. We have priced our product pretty high and we believe in pricing our product much higher than what competition does. So, we are not weary of the fact what the competition does to its price. We feel that competition if it reduces price, they will be diluting the image of their premium brand, therefore we don’t think they will reduce price. It would be an opportune moment for foreign companies to make some money through this tax reduction.”
It is a very welcome move and a win-win situation for the UK as well as India, he said and added that the demand of India to look into non-tariff barriers is genuine. “We are waiting for the fine print of the FTA, before that it is difficult to comment.”
Three-year maturation period contentious issue: Vinod Giri
The Director General of Brewers Association of India, Vinod Giri who has championed the cause of the spirits industry earlier, said, “We are yet to see what India gets in return and how the non-tariff issues are handled – especially the condition of three-year maturation to qualify as whisky and measures to prevent predatory pricing.
“In terms of impact Scotch makers are expected to improve their margins first by adjusting duty savings in invoice prices and if that happens, market dynamics will remain unchanged in short terms. Companies importing raw material for blending with domestic whiskeys in India will make some savings on cost.
“The most important long-term impact will be on BII (bottled in India) category. As duties start falling, the rationale for that segment will go away.”
About 30% reduction in retail price, avers Ajay Srivastava
Ajay Srivastava, the Founder of Global Trade Research Initiative and who was earlier part of negotiations with Australia said, “it’s a good decision and trade would increase between the two countries across sectors.”
While stating that as details of the FTA were still not available it would ‘difficult to hazard a guess’ on what the minimum import price would be, Srivastava said but added that “it will only be on the higher side, unlike wine which is around 4 dollars. Scotch always sells at a premium.”
Srivastava said the question that needs to be asked is how much would be the retail price be following the duty reduction. Giving a hypothetical scenario, he said if a bottle of Scotch whisky is 100$ and the duty at 150% and average State government duties is 60%, the consumer will be buying at $400. Now with the tariff halved from 150 to 75%, the consumer will pay 275$ which is almost 30% reduction. It is a good deal and people are anyways willing to pay for Scotch.”
On whether the Indian spirits market would be impacted, Srivastava asked “Is any Indian company producing Scotch. Nobody is in the bulk business. The Indian single malt is a niche market and does not compete with Scotch. Yes, Indians love Scotch.” However, he added that the Indian alcohol sector has to further develop and this would help in doing so.
He said the FTA would open the flood gates to Europe seeking reduction in tariff on wines, maybe up to 50%.
ISWAI believes premiumisation will get further boost
The CEO of International Spirits and Wines Association (ISWAI), Sanjit Padhi said, “We anticipate that this will accelerate the ongoing trend of premiumisation within the alcobev sector, positively impacting the exchequer revenues of Indian states. Cheaper prices may also result in premiumisation. India’s increasingly aspirational and discerning consumers will now have access to premium international brands at more accessible prices.”
Pegs on enhanced consumer experience
The Adviser (Tax and Regulatory Affairs) of ISWAI, I.P.Suresh Menon said, “ISWAI and its members welcome the UK-India Free Trade Agreement as a landmark development for the AlcoBev sector. The reduction in tariffs offers significant strategic benefits for both countries. India’s increasingly aspirational and discerning consumers will now have access to premium international brands at more accessible prices. This enhanced choice will elevate the consumer experience and boost growth across related sectors such as tourism and hospitality.
“We anticipate that this will accelerate the ongoing trend of premiumisation within the AlcoBev sector, positively impacting the exchequer revenues of Indian states. We see this agreement as a win-win for all stakeholders in the spirits sector whilst fuelling trade, attracting investment, and fostering the exchange of best practices. It reflects the shared commitment of India and the UK to deepening economic ties and advancing fair, balanced trade.”
Scotch Whisky Association calls its ‘once in a generation deal’
While the Indian alcobev sector is still hoping for a ‘level playing field’, the distilleries in Scotland are more than happy.
The Chief Executive of the Scotch Whisky Association, Mark Kent calling it a “transformational” deal said, “The UK-India free trade agreement is a once in a generation deal and a landmark moment for Scotch Whisky to the world’s largest whisky market.
“The reduction of the current 150% tariff on Scotch Whisky will be transformational for the industry. The deal has the potential to increase Scotch Whisky exports to India by £1bn over the next five years and create 1200 jobs across the UK. The deal is good for India too, boosting federal and state revenue by over £3bn annually, and giving discerning consumers in a highly educated whisky market far greater choice from SME Scotch Whisky producers who will now have the opportunity to enter the market.
“This agreement shows that the UK government is making significant progress towards achieving its growth mission, and the negotiating teams on both sides deserve huge credit for their dedication. The Scotch Whisky industry looks forward to working with the UK and Indian governments in the months ahead to implement the deal which would be a big boost to two major global economies during turbulent times.”
Chivas Brothers CEO terms it ‘game-changer’
Jean-Etienne Gourgues, Chivas Brothers Chairman and CEO, said the FTA is a “welcome boost for Chivas Brothers during an uncertain global economic environment.”
He said, “India is the world’s biggest whisky market by volume and greater access will be a game changer for the export of our Scotch whisky brands, such as Chivas Regal and Ballantine’s. The deal will support long term investment and jobs in our distilleries and bottling plants in Scotland, as well as help deliver growth in both Scotland and India over the next decade. Slàinte (meaning cheers in Irish) to the UK Ministers and officials who steered the deal though long negotiations.”
Chivas Brothers Ltd. which is part of the Pernod Ricard group of companies, exports over £2bn of Scotch whisky and gin every year, including brands like Chivas Regal, Ballantine’s, The Glenlivet and Beefeater. India is amongst Chivas Brothers’ largest export markets and the biggest consumer of whisky worldwide by volume. The UK-India trade agreement will help solidify and potentially expand on Pernod Ricard’s existing investments, which includes a €200m distillery construction in the Indian state of Maharashtra and £100m in bottling facilities in Dumbarton, Scotland.
Diageo quality and choice will increase across India
Diageo Chief Executive Debra Crew said, “The UK-India Free Trade Agreement is a huge achievement by Prime Ministers Modi and Starmer and Ministers Goyal and Reynolds, and all of us at Diageo toast their success. It will be transformational for Scotch and Scotland, while powering jobs and investment in both India and the UK.
“The deal will also increase quality and choice for discerning consumers across India, the world’s largest and most exciting whisky market. Diageo is a global leader in beverage alcohol with a collection of brands across spirits and beer categories sold in more than 180 countries around the world. These brands include Johnnie Walker, Crown Royal, J&B and Buchanan’s whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.”
Diageo is a leading player in India’s beverage alcohol sector and is among the top 10 fast-moving consumer goods companies in India by market capitalisation. Diageo has 35 manufacturing facilities across India, employs over 3,300 people directly in market with a further 100,000 jobs supported throughout its value chain. India is one of Diageo’s largest markets globally and accounts for almost half of its total global spirits volume.
Move will provide enhanced consumer experience and generate revenue opportunities
Premium-only and Smart Liquor Stores in Karnataka, Telangana, Haryana
Industry seeks De-regulation
The International Spirits and Wines Association of India (ISWAI), voice of the Indian Premium alcoholic beverage industry, has commended State governments for implementing progressive excise policies aimed at modernising retail formats, increasing revenue, and enhancing the overall consumer experience.
From Uttar Pradesh’s composite retail formats to Andhra Pradesh’s privatised model, Rajasthan’s premium mall-based stores, Madhya Pradesh’s single-bottle billing system, Haryana, Telangana, Karnataka, and Odisha’s premium-only retail formats, these progressive policies are redefining how the alcohol retail ecosystem operates across the country.
Welcoming the positive change, Sanjit Padhi, CEO of the International Spirits and Wines Association of India (ISWAI), said, “The reforms we are witnessing across different states in India, signal a paradigm shift in how the alcobev sector is perceived and managed, and reflects the state governments positive intent and commitment. Progressive excise policies are not only improving compliance and transparency, but also creating the foundation for sustainable, consumer-centric growth.”
UP’s reform-centric excise policy
ISWAI said at the forefront of this transformation is Uttar Pradesh, which has launched a reform-centric excise policy for FY 2025–26 with an ambitious revenue target of ₹55,000 crore, a 10% increase over the previous year. Structural changes like consolidating over 12,000 outlets into approximately 9,000 composite vends are doubling retail accessibility and ensuring broader market coverage. The adoption of a digital e-lottery system for retail licenses has already generated more than ₹2,250 crore, while retail license fees are expected to contribute over ₹4,200 crore, a testament to how digitization and transparency can directly drive state revenues.
Excise reforms are reshaping the alcobev landscape.
Speaking on these forward-looking changes, Sanjit Padhi said, “Uttar Pradesh has been a leader in driving structural reforms that have seen its revenue jump from ₹24,000 crore in FY 18/19 to a target of ₹55,000 crore in FY 25/26, growing at a rate of 13% CAGR. ISWAI members are the largest contributors to the state’s IMFL revenue (55%+), and we believe that the current changes are part of building a sustainable, growth-oriented revenue model that is also consumer-centric. The new outlets and investments in the retail infrastructure will result in a superior consumer experience.”
The reforms also offer greater operational stability for vendors. The state now grants two-year licenses via the e-lottery system, promotes fair competition by capping ownership at two outlets per individual, and fosters a level playing field for stakeholders.
Uttar Pradesh’s focus on premiumisation is reshaping consumer expectations and retail standards. New composite vends are being upgraded into well-lit, aesthetic, and secure outlets, particularly appealing to women consumers and supporting responsible consumption.
“We’re witnessing the rise of a more inclusive, modern alcobev ecosystem. From premium retail formats to safer consumer environments, these changes are aligning with global best practices and unlocking new growth opportunities. This will also provide consumers with high-quality premium brands and genuine products, deterring counterfeit products and encouraging responsible drinking. We hope that other states adopt the best practices of these progressive states to build consumer-centric, growth-oriented, sustainable revenue models,” added Sanjit Padhi.
Innovative Approaches by Andhra Pradesh, Rajasthan, Madhya Pradesh
Some states are following suit with their innovative approaches. Andhra Pradesh, through its privatised retail model, now supports 3,736 liquor vends and has witnessed a ₹1,800 crore surge in revenues and a 37% rise in Scotch sales, indicating strong premiumisation trends. Rajasthan has declared a four-year excise policy – a landmark reform that ensures stability in the sector. Speaking on this, Sanjit Padhi said, “The industry needs business stability as it allows room for building long-term investment plans. Rajasthan has taken this step, which we hope will inspire many other progressive states to evaluate and build this into their future planning process.”
The state of Rajasthan has already seen a 55% increase in IMFL sales since FY 2021, thanks to a retail overhaul that includes premium outlets at airports and shopping malls. States like Madhya Pradesh and Rajasthan are also experiencing significant volume growth—27% and 55% respectively—by embracing composite retail formats that ensure equitable access across urban and rural areas while reducing the prevalence of illicit trade and counterfeit products. Madhya Pradesh’s 2025–26 policy has also introduced features like stock carry-forward and single-bottle billing for premium brands, enhancing traceability and efficiency.
Premium-only and Smart Liquor Stores in other States
Similarly, Uttarakhand is launching Smart Liquor Stores in malls and department outlets, while Haryana, Telangana, Karnataka, and Odisha are promoting premium-only retail formats to meet rising urban demand.
Industry seeks Deregulation
Meanwhile, one of the biggest challenges the industry faces is pricing control. In this context, Sanjit Padhi emphasised the need for deregulation in the IMFL sector. “Market forces should determine pricing, and no company will risk its business by arbitrarily pricing itself out of the market,” he said. ISWAI strongly recommends the removal of pricing controls to liberate and unshackle the industry, encouraging greater investment and more robust contributions to state revenues.
In addition, leading states like Madhya Pradesh, West Bengal and UP have digitized their processes and significantly improved the ease of doing business. This is another area where other states can consider increasing efficiencies, which could lead to better resource utilisation.
As more states look to emulate these successful models, India’s alcobev landscape will continue to evolve into a refined, progressive ecosystem that balances public welfare, economic growth, and consumer preferences, marking a significant milestone for the industry.
ISWAI members largest revenue contributors
Members of ISWAI include global leaders Bacardi, Brown Forman, Campari Group, Diageo-United Spirits, John Distilleries, Moet Hennessy, Pernod Ricard, Suntory Global and William Grant & Sons and have almost 98% of the business produced in India through Indian Made Foreign Liquor (IMFL), Bottled-in-India (BII) products and Indian Single Malts, thereby making the sector strong proponents of the ‘Make in India’ ideology, generating employment and business opportunities, both directly and in ancillary services & industries, across states. ISWAI members are the largest revenue contributors, with over 45% share in volume and more than 55% share in value. With over 95 manufacturing plants in the country, ISWAI members have large investments in India.
Carlsberg India has reported a jump of 60.5% in its profits at ₹323.1 crore in FY’24, according to RoC filing by the company. Carlsberg India total revenue was up 15.2% at ₹8,044.9 crore for the financial year ended March 31, 2024.
The company said, “During the financial year 2023-24, profit amounting to ₹323 crore under the standalone financial statement has been carried forward to ‘Reserve and Surplus’ including other comprehensive income in the balance sheet.”
Carlsberg India Pvt Ltd had reported a total profit of ₹201.3 crore a year before in FY’23, and its revenue from operations was at ₹6,937 crore on a standalone basis. Its “Excise duty expense” in FY’24 was at ₹4,877.8 crore, up 13.4%. This was at ₹4,301.6 crore a year before in FY’23.
“Cash and bank balances increased from ₹9,304 million to ₹11,165 million with strong business performance, better trade working capital and lower capital investment,” it said. Advertising promotional expenses of Carlsberg India were at ₹96.5 crore in FY’24 and total expenses stood at ₹7,628.3 crore, up 13.4%.
The market share however declined to 13.3%, from 14.9% in the fiscal year 2023-24, but Carlsberg India continues to hold the number three position in the Indian beer market. Carlsberg India is the subsidiary of Singapore-based South Asian Breweries Pte Ltd, owned by Danish brewing major Carlsberg.
The newly elected Delhi government run by the Bharatiya Janata Party (BJP) has said that due to the implementation of the new liquor policy under the AAP from November 2021 to August 2022, only private shops were allowed to sell alcohol. It said that over ₹5,000 crore was collected from taxes on liquor in the current financial year.
Responding to a question asked by BJP MLA Abhay Verma in the Delhi Assembly, the government said it earned revenue of ₹5,068.92 crore from excise duty and VAT (value added tax) on the sale of liquor in the financial year 2024-25, till February.
The question comes at a time when the BJP has continued to attack the AAP over the alleged liquor policy scam. Former chief minister Arvind Kejriwal and his deputy Manish Sisodia were among the AAP leaders who were jailed in connection with the alleged scam.
The new Rekha Gupta-led BJP government reported that ₹5,164 crore was collected in taxes on alcohol in 2023-24, ₹5,547 crore in 2022-23 and ₹5,487 crore in 2021-22. The government stated that due to the implementation of the new liquor policy in Delhi under the AAP from November 2021 to August 2022, only private shops were allowed to sell alcohol. However, when the old liquor policy was reimplemented in September 2022, government liquor stores were permitted to operate.
In 2023-24, 21.27 crore litres of alcohol were sold in Delhi, which translates to 5.82 lakh litres per day, while the figure for 2022-23 was 25.84 crore litres.
In 1987 itself, actor Danny Denzongpa had quietly started Yuksom Breweries
Long list of International actors, singers, sports personalities own liquor brands
India is yet to see a woman celebrity owning a liquor brand
On April 10, actor and businessman, Ajay Devgn joined the bandwagon of celebrities, part owning liquor brands with the launch of ‘The GlenJourneys Pioneer Edition’, a premium 21-year-old Highland single malt scotch whisky. Devgn has partnered with luxury spirits house Cartel Bros in this venture. He is not the first, nor is he going to be the last to venture into owning liquor brands, even as premiumisation is becoming the norm and connoisseurs are increasingly becoming aspirational and are looking at experiences, brand identity and quality. This trend began in the West with several celebrities associated with high-end brands and is catching up here.
Long before any of them really got into owning liquor brands or even before premiumisation had set in, our own Danny Denzongpa, the villain and character actor in Bollywood, had founded the Yuksom breweries in his hometown – Sikkim. Actor Tsering Phintso alias Danny Denzongpa’s, Yuksom Breweries Limited was established in 1987. Subsequently, in 2005 and 2009, Yuksom set up its second greenfield project in Odisha and acquired third brewery, Rhino Agencies in Assam. The three breweries together have a production capacity of over 680,000 HL per annum.
Yuksom Breweries has its market in Sikkim, West Bengal, Assam and Arunachal Pradesh. The brands include Hit (Super Strong Beer); He-Man 9000 (Super Strong Beer, bottle and can); Dansberg 16000, brewed at Denzong Breweries and sold in Odisha and also internationally (Super Premium Beer); Dansberg Blue (Premium Lager); Denzong 9000 (Strong Beer); Dansberg Red (Special Strong Beer); Dansberg Strong (Premium Strong Beer); He-Man 9000 Gold (Ultra Super Strong Beer); Himalayan Blue (Premium Lager Beer) exported to US and Australia and Himalayan Snowman (Super Premium Beer) sold in US.
Shah Rukh Khan and son Aryan Khan’s D’Yavol Inception making waves
Shah Rukh Khan (SRK), the highly popular Bollywood actor and his son Aryan Khan jumped into the fray in 2023 with the launch of D’Yavol Inception, a 100% pure malt Scotch whisky. Originating from Scotland, this whisky is carefully crafted as a medley of eight selected single malts hailing from the Speyside, Highland, Lowland, and Islay regions.
His son recently launched fashion and lifestyle brand D’yavol X in partnership with the Belgian drink and brewing company Anheuser-Busch InBev (AB InBev) in the Indian market.
D’Yavol which means ‘Devil’ in Russian has already captured the imagination of whisky drinkers in Karnataka, Maharashtra, West Bengal, Haryana, Delhi, Uttar Pradesh, Telangana, and Goa. The price ranges from ₹6,000 in Haryana to ₹9,950 in Karnataka. It has bagged several awards including the ‘Best Overall Scotch’ as well as the ‘Best of Class’ Blended Malt Scotch Whisky at the 2024 New York World Spirits Competition (NYWSC) for its flagship whisky – Inception.
D’Yavol co-founder Shah Rukh Khan said “INCEPTION’s award at the New York World Spirits Competition is a testament to the belief that the finest things in life are crafted with care and passion.”
Sanjay Dutt ‘s The Glenwalk has amazing sales
Another actor who has invested in alcobev startup Cartel & Bros is Sanjay Dutt and The Glenwalk Scotch whisky is quite popular having notched up impressive sales of 1.4 million bottles in FY 2024-25. Riding on his popularity, the company hopes to touch 4.2 million bottles in FY2025-26. Launched in December 2024, the brand is said to have generated over ₹15 crores in just 45 days, selling over 300,000 bottles in Maharashtra alone.
Cartel & Bros is a partnership of Manesh Sani and Mokksh Sani of Living Liquidz, one of the largest liquor retail chains in India; Jittin S. Merani of Drinq Bar Academy; and Rohan Nihalani of Morgan Beverages. “Unlike other Scotch whiskies in India, where the alcohol comes at a higher ABV from Scotland and is then bottled in India with Indian water, The Glenwalk is made and bottled in Scotland with Scottish water. This guarantees an authentic taste of Scotch,” said Jittin S. Merani.
Cartel & Bros are totally in sync with market trends and know how celebrities with their fan-following can influence them into becoming potential consumers. They are playing with the psyche of the fans and are roping in celebrities as the latter can build brands at accelerated pace. We have seen that happen with The Glenwalk. Now, Cartel and Bros has brought on board Ajay Devgn for ‘The GlenJourneys’, but we are yet to see any female celebrity in the alcobev sector, but the guess is, it won’t be too long a wait as India has seen a number of young women entrepreneurs launching gin, tequila and other categories with success.
Ranveer Singh equity partner in ABDMaestro
Last year, another superstar Ranveer Singh became an equity partner in Allied Blenders and Distillers Maestro, in a new business venture to offer a portfolio of premium brands. “I am delighted to partner with Allied Blenders and Distillers’ unique initiative. This venture is not just about creating and offering premium and luxury spirits, but equally about realising the aspirations of the Indian consumer. We’re blending world-class products, sourcing and craftsmanship with the rich, vibrant flavours of India, creating experiences that speak to people,” said Ranveer Singh, business and creative partner.
“At ABD Maestro, we believe in the power of innovation. This new venture, with a major impact personality like Ranveer Singh, represents our commitment to bring together simply the best. With him as our business partner and a creative mentor, we are confident that our luxury products will resonate with consumers,” said Alok Gupta, Managing Director, Allied Blenders and Distillers Limited.
Rana Daggubati’s Loca Loka
Actor Rana Daggubati owns an international tequila brand Loca Loka (Loca in Spanish means crazy and Loka in Sanskrit means world), using 100% pure highland agave sourced from the highlands of Jalisco, Mexico. In collaboration with music composer Anirudh Ravichander, Loca Loka is imagined in India, authentically produced in Mexico. The duo has blended & bottled the cultures, colours, art, tastes, and emotions of the two nations with vibrant energy.
At the launch last year, Daggubati said, “Both Indian and Mexican cultures boast rich histories, vibrant music and art, and much more. With Loca Loka, we look forward to bringing the essence of these cultures together and sharing them with longtime lovers of tequila, as well as those who are beginning their tequila journey. The entrepreneurial opportunity to innovate within the spirits industry while honouring and merging Indian and Mexican traditions is an adventure, I actively wanted to be a part of instead of just being a brand ambassador. There are so many possibilities with this venture and the introduction of Loca Loka is just the start.”
Celebrity Pull Factor
There is more than one reason why companies are bringing celebrities on board. Besides, their pull factor, making the brands more noticeable and reaching a wider audience, celebrities, unlike earlier days, are weary of advertising, even surrogate advertising. In India, the Central Consumer Protection Authority (CCPA) has escalated its efforts to clamp down on the indirect promotion of alcohol and tobacco. Celebrities and social media influencers who engage in such promotional activities could now face penalties of up to ₹50 lakh, according to new CCPA guidelines.
From advertising to investing, celebrities across the globe have made a decisive impact on businesses as they help in reaching a broader audience; improve brand credibility; go beyond boundaries; and make brands stand out from competitors.
Dwayne Johnson, Beyonce, Michael Jordan…. List of celebrities owning spirit brands is unending
Celebrities in India have just taken the first step, while internationally the list of celebrities from the field of cinema, music, sports etc, is quite exhaustive. They include Fast and Furious actor Dwayne Johnson (owns Teremana Tequila brand ); American rapper and actor Snoop Dogg (Still G.I.N); American singer and husband of Priyanka Chopra, Nick Jonas (Villa One Tequila); actor Ryan Reynolds (Aviation American Gin); Hollywood star George Clooney and Rande Gerber (Casamigos Tequila); Singer Beyonce (SirDavis Whisky); American TV personality and influencer, Kylie Jenner (Sprinter vodka); Hollywood star Brad Pitt (The Gardener Gin); actors Matthew McConaughey and Camila McConaughey (Pantalones Organic Tequila); Basketball icon Michael Jordan (Cincoro Tequila); Music band The Rolling Stones (Crossfire Hurricane Rum); actor and singer Jennifer Lopez (Delola, RTD spritz); actor Emma Watson and her brother Alex (Renais Gin); WWE star John Cena (Thomas Ashbourne); ‘Sex and the City’ TV personality Sarah Jessica Parker (The Perfect Cosmo by SJP); Heavy metal band Metallica (Blackened Whiskey); actor Mark Wahlberg (Flecha Azul Tequila); actor Eva Longoria (Casa Del Sol Tequila); singer Mariah Carey (Black Irish cream liqueur); Jamie Foxx (BSB-Brown Sugar Bourbon); actor Kate Hudson (King St. Vodka); singer Bob Dylan (Heaven’s Door Spirits, handcrafted whiskeys); actor Channing Tatum (Born and Bred Vodka); singer Justin Timberlake (Sauza 901 Tequila); David Beckham (Haig Club) among many others.
The Kerala government has announced that it would allow for the establishment of distilleries, breweries and spirit manufacturing units as to check import of liquor from other states. The new policy has several concessions for production and distribution of liquor, in the state’s bid to increase revenues from excise.
Under the new policy, now liquor sale can happen in industrial parks. In 2022-23, the Kerala government had allowed liquor permits in IT parks. Another concession it has granted is to give a special one-day permit on dry days. Hotels with three stars or more, along with heritage and classic resorts, now can apply for a one-day permit to serve liquor on the first day of the month for business meetings, international conferences, and other gatherings. No permission is granted on other dry days.
As per media reports, the government had granted permission to set up a liquor manufacturing centre in Elappully, Palakkad and a controversy had erupted. Now the government is planning to be lot more liberal in allowing breweries and distilleries across the state. The new liquor policy builds on the previous year’s guidelines of allowing the establishment of distilleries and units for manufacturing extra neutral alcohol (spirits).
Kerala in 2023-24 had generated a revenue of ₹31,618.12 crore from alcohol and sale of lottery tickets, accounting for one-fourth of the total revenue of the state. Revenue from alcohol sales amounted to ₹19,088.86 crore, making it the larger of the two main sources. Income from lottery sales was recorded at ₹12,529.26 crore. These figures combined account for approximately 25.4% of state’s total income.
In the recent past, the stock market has crashed massively with the BSE Sensex going below 77,000 and the NSE Nifty50 also saw a sharp decline. Most broader market indices have been in the red. At the time of writing on February 13, the Sensex and Nifty were trading higher bringing relief for investors, following a six-day decline. The rise has been attributed to the meeting of the Indian Prime Minister Narendra Modi with the US President Donald Trump and the appreciation of the rupee against the dollar.
How have the liquor stocks been performing in this backdrop. It is reported that a few liquor stocks are outperforming consumer staples, even though there is slowdown in consumption. Brokerage firms are betting on some liquor stocks, the notable ones being Radico Khaitan and United Spirits. Some brokerage firms have estimated an upside potential of up to 19%, while some others have given six stocks a growth potential of 7% to 54%, something to cheer.
This is despite the demand environment remaining muted in Q4 FY24 due to inflation. In the previous quarter, liquor companies have had higher sales, thanks to the festive season, Cricket World Cup and wedding season.
United Spirits, a good bet
Though United Spirits, with famous brands such as Johnnie Walker, Black & White, Black Dog, Signature, Royal Challenge, McDowell’s No.1, Smirnoff and many more, had subdued sales in Q4 FY24, it is now focussed on premiumisation, in line with global trend of upgrading to better brands.
For the fourth quarter of FY24, the company recorded consolidated net sales of ₹2,666.00 crore, down from ₹2,989.30 crore in the December quarter and ₹2,864.70 crore in the September quarter. For the nine months ending December of the current financial year, the company notched up net sales of ₹18,995.50 crore, compared to ₹7,879.90 crore in FY22, ₹6,946.60 crore in FY21, and ₹5,664.80 crore in FY20. PAT for the nine months of the current year stood at ₹927.60 crore, compared to ₹847.70 crore in FY22.
United Spirits stock is trading at ₹1394.50 (down 3%) with the 52week low being ₹1075 and the high being ₹1700. If an individual had invested ₹1 lakh on February 12, 2020, it would now be worth ₹2.02 lakhs.
Radico Khaitan Riding High on Premiumisation
The next company to watch is Radico Khaitan, manufacturers of Rampur Indian Single Malt Whisky, Magic Moments, Dazzle Vodka, 8PM whisky and more. The company, one of the largest manufacturers of Indian Made Foreign Liquor (IMFL), which has 30 plus bottling units, over 75,000 retail outlets, reported an increase of 27.05% in its consolidated net profit to ₹95.48 crore in the third quarter ended December 2024. The company had posted a consolidated net profit of ₹75.15 crore in the October-December quarter a year ago, according to a BSE filing from Radico Khaitan.
Its revenue from operations went up 8% to ₹4,440.90 crore during the quarter under review. The figure was ₹4,111.23 crore in the corresponding quarter of the previous fiscal. In the December quarter, Radico Khaitan’s total IMFL volume was at 8.36 million cases, up 15.3% year-on-year. The Chairman & Managing Director Lalit Khaitan said, “Despite challenges in overall consumption growth, the spirits industry in India has experienced strong momentum, particularly driven by premium brands. In this context, we have delivered an impressive operational performance in Q3 FY25.”
Radico Khaitan is driving a premiumisation strategy which has benefitted the company’s financials. The premium products category is growing at over 20%. Rampur India single-malt whisky is gaining popularity by the day, all of which are driving EBITDA margins to 17-18% and improving the cash flow. The company expects these positives to result in a sharp fall in its debt levels by FY26.
If an individual had invested ₹100 in Radico Khaitan in 2021, it would now be fetching ₹242.81. The stock is trading on February 13, 2025 at ₹2,119 (down by ₹118 for the day).
United Breweries 17% gain in a year
United Breweries, subsidiary of Heineken N.V and makers of Heineken, Kingfisher Premium, Zingaro, Kalyani Black Label, London Pilsner etc., had gained 3.9% in trade following Heineken N.V reported its 2024 full-year results. The market capitalisation of the company stood at ₹54,561.32 crore. The 52-week high of the stock was at ₹2,299.4 per share and the 52-week low of the stock was at ₹1,645.8 per share.
UB is a market leader and its brand Kingfisher grew in volume in mid-single-digit, while Kingfisher Ultra and Heineken Silver volumes grew in the mid-thirties, gaining segment market share. UB shares have gained 17% against Sensex’s rise of 7.3% in the past one year.
Sula Vineyards Robust Growth
India’s largest wine producer, Sula Vineyards, has reported robust growth in its premium wine portfolio and wine tourism segment for the third quarter (Q3) and nine months (9M) of FY25, despite a challenging market environment. The company, known for its expansive range of wines and innovative wine tourism initiatives, announced its financial results, showcasing resilience and strategic adaptability.
In its latest performance update, Sula posted its highest-ever 9M net revenue of ₹489.2 crore, marking a 1.7% year-on-year (YoY) growth. This growth was largely driven by the company’s premium and elite wine brands, which saw a 5.6% YoY increase in Q3. The share of these higher-end labels in the company’s portfolio reached an all-time high of 80.5% in Q3, up from 77% last year, reflecting Sula’s strategic focus on catering to India’s evolving taste for luxury and quality.
Wine tourism, a key differentiator for Sula, also shone brightly, recording a remarkable 11.6% YoY growth in Q3 revenue. This was attributed to a vibrant festive and wedding season, coupled with higher guest spending, improved occupancy rates (81% compared to 76% in the previous year), and an increase in Average Room Rates (ARR).
However, the company faced significant headwinds in Q3, impacting profitability. The reduction in WIPS credits resulted in a direct EBITDA impact of ₹4.7 crore for the quarter, contributing to a 26.3% decline in EBITDA to ₹53.9 crore. Profit After Tax (PAT) also fell by 34.7% YoY to ₹28.1 crore, reflecting the pressures on margins.
Sula Vineyards share price is ₹317.55 as of February 13, having a 52 Week high of ₹639.95 while 52 week low is ₹308.10. Some brokerage firms are suggesting investors to hold on.
Tilaknagar Industries confident
Tilaknagar Industries Ltd., primarily engaged in the manufacture and sale of IMFL and extra-neutral alcohol, has brands such as Courrier Napoleon Brandy-Green, Mansion House Whiskey, Lumumba, Apple Fizz, Madira Rum, Brandy Smash, Warm Punch, etc.
Tilaknagar Industries for nine months FY25 had a net revenue from operations at ₹1,028 crore v/s ₹1,035 crore the previous period. The EBITDA improved by 28.6% to ₹176 crore v/s ₹137 crore; adjusted for the subsidy income. Volumes grew 2.1% to 84.9 million cases, while the net service revenue stood at ₹1,227 per case.
However, the company’s share price had hit 20% lower circuit at the time of writing, following the Bombay High Court’s dismissal of its petition in a trademark dispute involving the Mansion House brand. The company is going on an appeal on the Court order. The share price on February 13 was ₹261, the 52 week high been ₹457 and the low been ₹182.05, with a lot of promise. The alcobev market in India has been growing gradually over the years, thanks to the rising disposable income, urbanisation and retail innovations, all of which are making liquor stocks a good bet, despite the industry been highly regulated and prohibition in place in some states. The alcobev sector is dynamic, attracting investors as demand for alcobev products sees no decline. India’s alcohol industry is projected to reach sales of US$ 112,338.9 million by 2034, indeed a bet worth taking.
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