Rs. 2.5 Trillion India Alcohol Market Staring at Losses after Supreme Court Ruling

The India alcohol market may suffer losses to the tune of $10 billion, after a ruling by the country’s apex court barred sale of liquor near major highways.

The move is aimed at curbing road accidents in India, a significant percentage of which are thought to be on account of drunken driving.

While restaurateurs are coming up with ingenious ways to beat the court’s ruling, analysts are of the opinion that the India alcohol market will take a hit. According to a report by consulting firm Future Market Insights, the India alcohol market was worth INR 2.5 trillion in 2016.

Analysts are of the opinion that the alcohol ban on highways will significantly impact the travel and tourism sector. Industry estimates project a daily loss of INR 1,000 crore. The impact will be massive in Maharashtra and Goa, states that earn significant excise revenues.

Gurugram, formerly known as Gurgaon, a satellite township in northern India, will also be among the hardest hit. The city is home to multinationals, and has the presence of nearly 50% of the Fortune 500 companies. In Gurugram, the impact will be palpable in Cyber Hub, a commercial complex that houses numerous companies, eateries, and bars.

Hospitality businesses in India have unilaterally criticized the ruling by the Supreme Court. They are of the opinion that this decision will not only dent India’s image among foreign investors, but it will have a significant impact on the country’s GDP.

However, not-for-profit organizations and road safety proponents have welcomed the ruling. In spite of having only 1% of world’s vehicles, India’s share of total world fatalities is a whopping 10%. In the absence of stricter law enforcement, drunken driving is quite rampant in India. The practice of picking up alcohol and consuming it while driving is also widespread.

Opponents of the ruling, who don’t have a stake in the alcohol industry, are of the view that the ruling will do little to cut down the rate of road accidents. While India has stringent fines on overtaking and speed-limits, lack of adequate law enforcement means rules are violated with impunity.

Many Indian states have moved towards prohibition in the recent past. Often thought of as an appeasement move, governments are often under pressure from anti-alcohol crusaders to make prohibition a part of their manifesto.

Gujarat, the birthplace of Mahatma Gandhi, has banned sale of alcohol since 1960. Nagaland and Mizoram, states with a dominant Christian population, have enforced a ban on liquor consumption since long. In recent years, governments in Bihar and Kerala have implemented a state-wide alcohol ban.

By Malar kodi

Malarkodi M comes with a vast experience in food & beverage market research, with a special focus on emerging trends in the ingredients sector. A well-known figure in the global F&B sector, Malarkodi M has helped both large-scale and small-scale food & beverage companies develop business strategies through her research and consulting expertise. Malarkodi has been at the forefront of discussions on the evolving F&B ingredients landscape and has voiced her opinions at international forums. Her international presentations at the ‘Agrochemical Business Strategies and Opportunities’ at Berlin (2014) and Vitafoods - Asia-Pacific Heart Health Functional Food Market, Hong Kong (2016) was widely appreciated, serving as a strong foundation for further discussion on emerging trends. Malarkodi’s insights are regularly covered by reputed food & beverage journals, including Food Navigator, Nutraingredients-asia and DairyReporter.

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