LIQUOR – A BILLION DOLLAR BUSINESS

ByS. John WilfredMBACRESCENT BUSINESS SCHOOL

HOW IT ALL BEGAN

• Initially started out to be a pain reliever• Eventually became a thing of addiction• Various forms of alcoholic beverages came into

production• Country sprit turned out to be highly

predominant in rural areas, plunging through countless lives

• More than a fifth of alcohol produced in the world is consumed by Indians

GOVT Vs PRIVATE

• In Tamil Nadu, Kerala and Delhi the govt. Has everything under its control from wholesale to retail so as to make sure no revenue is spilled

• Andhra Pradesh, Orissa, Bihar, Chattisgarh, Rajasthan, Uttarakhand, Uttar Pradesh, Karnataka and Bihar, governments run the wholesale business, leaving retail to private players

• Maharashtra’s liquor business is in private hands

STATE’S COFFER

• Liquor amounts to a larger share of a state’s revenue

• Tamil Nadu incurs Rs. 21,800 crore revenue from liquor

• 20% of any state’s revenue is likely to come from liquor industries

• Likewise in Kerala 22% of its total revenue comes from bottle

• In Karnataka its 20% of state’s Excise revenue• West Bengal’s Excise revenue in the last

financial year was Rs. 2,600 crore

DRINKING CULTURE

• Economic affluence, urbanisation, changing lifestyles and social mores are all persuading young people to take to drinking

• Indians’ drinking habits and patterns are problematic

• At least a third of the drinkers fall in the ‘hazardous drinkers’ category

• NIMHNS study in Karnataka found that for every rupee the government got off the bottle, it lost more than Rs. 2 in terms of healthcare expenses.

PRICE RISE A SOLUTION?

• “Asking a daily-wage worker to pay 600 per cent tax on his drink is cruel”.

• The government’s claim isn’t right.• “No matter what the price is, the habitual

drinker will buy his drink. Only, the quantity of food on his children’s table will shrink.”

GROWTH

• Indian liquor industry was expanding 30 per cent year-on-year

• In 2015, liquor consumption is pegged to touch about 20 billion litres

• The total value of spirits, wine and beer consumed in India is projected to be in the neighbourhood of Rs. 1.5 lakh crore in 2015

POSSIBLE SOLUTION

• Strong campaign and awareness programmes• Removing liquor form its root (long term

process) • Finding alternative ways to fill state’s coffer

like solar power production, bio fuel and cutting down unnecessary expenses