Demand for spirits slows on increased taxes and high base
brandy category, industry executives said citing latest excise department data.
«In general, the regular category or the popular category is having muted growth as far as the industry is concerned. Certain states, which are big states like Karnataka, increased the duty by 20%.
There is an impact on the demand at that price point. In UP, there is some down trending,» said Dilip Banthiya, chief financial officer at Radico Khaitan during its earnings call.
Between July and September, whisky remained the biggest segment by far, accounting for two-thirds of the overall spirits demand and grew 3.2% on a high base.
Brandy and rum sales fell 0.7% and 0.3% each. Vodka grew 13.1% and gin sales increased 10.6%, although on a low base, according to the excise data.
Mass priced whiskey sales fell 4.5%, indicating pressure on the segment even as premium products, especially whiskey grew 4-18%.
“The overall spirits industry after very strong growth in the post- Covid years has normalised to a steady state.
Consumers continue to aspire for better quality products and brands,” said Bikram Basu, chief strategy and marketing officer at Allied Blenders and Distillers which saw newer brands — Sterling Reserve and ICONiQ Whiskies — each crossing sales of million cases annually.
The spirits market in India expanded 10% during the first half of the calendar year, and 7% in the quarter ended June, the only discretionary category to retain strong growth momentum as consumers cut back on other lifestyle segments such as apparel and electronics. The December quarter is generally a peak period for spirits due to weddings, festivals and winter months.
USL, the maker of Johnnie Walker and Smirnoff said September was a fairly soft month in terms
