Full recovery of beer sector possible by end of this year

Summer is approaching and industry is hopeful and banking upon the season to drive sales.Post lockdown there has been many challenges in the market taxation on the alcobev industry increased across states after the covid as covid cess, rise in excise duty as government tried to overcome a sudden short fall in the revenue.Few states like Delhi, Andhra and j&k raised taxes by 50-70%. Bengal and Odisha increased duty by 30%. In other major markets, taxes raised from 10-20%.

United Breweries and Anheuser Busch InBev, which together control three-fourths of the Indian beer market, expect the industry to take time to come out of the pandemic blues as the pace of recovery varies from state to state.

AB InBev, maker of Budweiser beer, expects the industry to fully recover only in the first quarter of 2022, that too only if Maharashtra and Telangana – which account for 35% of total sales – are able to control Covid cases and rework excise duty.

the maker of Kingfisher beer is in talks with several state governments to allow online delivery of the beverage, which for consumers, is bulkier to carry compared to spirits. Dining at restaurants, bars and pubs that accounts for more than a third of beer sales, still remains restricted.

“Building beer for home consumption is a key marketing task for us. A new channel (online) is emerging and the first thing is not to make it in a couple of states but get more state governments to allow online sale and delivery of liquor. Then get the aggregators and delivery partners to make beer an integral part of their sale,” said Rishi Pardal, in his first interaction after becoming the managing director at UB.

While shoppers of daily groceries have been buying bulk packs to load pantry and seek more value, the beer segment has limited options of cans and bottles. UB, however, is launching four and six cans bundled together as a single pack to drive higher consumption at home.

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