Liquor companies prompt states to hike prices

Though distillers fix the prices of their products, they need to be approved by the state governments.

With many liquor companies being forced to bear cost escalation, wine makers are demanding revision in the prices of alcoholic beverages.

Devans Modern Breweries, which sells Godfather and Six Fields beers, said its costs have risen steadily over the past few quarters.

Managing Director Prem Dewan said, “The overall increase is as high as 20% in the last 15 months alone. Although there has been an increase in the MRP of beer, the pre-breeding price has remained stagnant in many states, resulting in losses. is,” he said.

Even for large wine makers, rising costs, especially for packaging, raw materials and shipments, have begun to take a toll.

“We urge policymakers to recognize supply-chain pressures and allow alcoholic beverage manufacturers to take advantage of price increases,” said Anasuya Ray, vice president, corporate affairs – South Asia for AB InBev, Joe Budweiser and Corona Like owns brands.

Companies said more flexible regulatory processes are the need of the hour to ensure that businesses in the sector are viable.

The Confederation of Indian Alcoholic Beverage Companies (CIABC), the body representing country liquor companies, sent representations to at least nine states in November asking for inflation in input costs, especially extra-neutral liquor, or ENA prices. , which is the primary raw material for making alcoholic beverages.

Not only this. According to the International Spirits and Wine Association of India (ISWAI), the price of tamper-proof caps that make wine bottles non-refillable has also gone up by about 15% in a year.

ISWAI Chief Executive Neeta Kapoor said that the cost of outer carton has increased by 37%.

“The current regulatory framework means that we have to keep the overall price of the product stable. This has an impact on the overall working margin for the market,” said Mohit Bhagchandani, founder of Mumbai-based 7InkBrews, which launched Copter7 beer in 2021 during the second wave of the pandemic.

Bhagchandani said costs are rising on all fronts, be it raw materials, taxes, trade, logistics, or manufacturing.

The material and packaging cost has increased by about 15-20%, affecting the overall production outlay.

Kasturi Banerjee, founder and director of Stilldistilling Spirits, which made Maka Zee Rum out of Goa, said that the value added tax and excise duty on raw materials that have been raised during the COVID pandemic have still not been reviewed or reduced.

Abhishek Khaitan, managing director of brewing company Radico Khaitan, said that although the operating environment has improved significantly since last year, it saw unprecedented levels of input cost inflation, which impacted profit margins, especially for the company’s non-Indian -For manufactured foreign liquor. IMFL business.

CIABC Director General Vinod Giri said the beverage lobby has provided a list of cost escalations to state governments.

“We mentioned all the recent cost escalation and the cost escalation that has happened over the years, mainly due to extra-neutral alcohol,” he said.

Giri said the association has met several government officials and apprised them of the issue. “We were assured that when the next policy is being framed, it will be taken into consideration,” he said.

However, they do not see any change happening before April 1, when the new excise policies come into force.

“Many governments have not given any price hike in the last two to three years. We’ve got a lot of assurances, but we won’t know until we see it.”