The Hindu Business Line : Changing lifestyles push liquor sales

IT was more than just a frothy year for the country's liquor industry in 2005 combined with consolidation, price stability and regularisation. The UB Group and SAB Miller emerged as the country's lead players after their now-famous acquisitions of Shaw Wallace's spirits and beer businesses, respectively. With virtually just two players ruling the market, more resources are to be channelised towards above-the-line brandbuilding exercises, said industry sources.

Beer continued to be the favourite drink among the urban youth. Increased purchasing power and changing Indian lifestyles have contributed to its double-digit growth with sales likely to touch 100 million cases this year. The UB group, which has about 45 per cent stake in this market, expects to increase its brewing capacity by 15 per cent taking it to 60 million cases during the year. According to Mr Shekhar Ramamurthy, Vice-President, Sales and Marketing, UB's breweries division, "Sales have gone up and the industry has seen a 15 per cent growth so far."

Mr U.B. Bhat, Director, UBB Management Consultants, a Bangalore-based consultant to the industry, said that price stability through the year has also contributed to the rising domestic liquor sales. "The Northern region has also contributed significantly as Rajasthan has regularised sales in the State with the formation of a distribution corporation akin to Karnataka," he added.

This was also the year of the pints and the variants: the 330-ml beer pack was seen as driving sales across the country. Flavoured low alcohol beverages added zest to the market. Whether this will result in a setback to beer consumption (as some industry observers feel) is doubtful, said Mr Bhat. "Beer drinkers may not switch over but women and young people who have been consuming vodka and rum may try these flavoured drinks," he added.

But there has been a quiet but significant growth is the country's wine sales. Sales of imported wines are estimated to be in the region of 1.2 lakh cases per annum, while locally produced wines clocked about 4.5 lakh cases annually.

Mr Abhay Kewadkar, Vice-President, Grover Vineyards, said that the industry saw a 40 per cent growth this year. Interestingly, Indians seem to be stocking more red wine, thanks to the `heart and health' campaign. Last year, red wine accounted for 50 per cent sales, white wine about 40 per cent and sparkling wines about 10 per cent. This year, the ratio has changed to 60:30:10 in favour of red wine, said Mr Kewadkar.

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