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Alcoholic Beverages in India - Spiritz Magazine http://www.spiritz.in/alcoholic-beverages-in-india/?age-verified=bf980c7119

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Cover Story Alcoholic Beverages are the drinks that typically contain 3% to 40% alcohol. It has been used by several
Bar Absolute people either as part of the standard diet, for its relaxant and euphoric effect, for hygienic/medical reasons,
Discovering Distilleries for recreational purposes, for celebrations, for artistic inspiration, as aphrodisiacs and for many other
Overview reasons. It is said that alcohol is being produced and consumed from even before 8000 BC. The alcohol
In focus serving differ as per the place.
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The Categorization of Alcoholic Beverages in India:
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Alcohol Beverages are categorized into three classes: Beer, Wines, and Spirits. Beer: It is produced the conversion of starch and fermenting of

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Alcoholic Beverages in India - Spiritz Magazine http://www.spiritz.in/alcoholic-beverages-in-india/?age-verified=bf980c7119

the resulting sugar. The starch and enzymes are often resultants from malted cereal grains. Barley and wheat are the most common malted Cereal
grains. Beer is the third most popular drink after water and tea. It is the world’s most commonly consumed alcoholic beverage. Most beer is around
4% to 6% alcohol by volume. In rare cases, it contains 1% or 20% alcohol by volume.

Wine: It is produced by fermenting of grapes or other fruits. Besides grapes, they are produced by fermentation of pomegranate, rice, elderberry,
and apple. Wine production involves a long aging process and a longer fermentation process. Most wines contain 9% to 16% alcohol by volume.
The champagne or sparkling wines are prepared by adding a small amount of sugar before bottling.

Spirits: The alcoholic beverages of higher alcohol content are spirits. The minimum of 20% alcohol by volume is present in spirits. They are
produced by fermenting and later distilled to obtain the alcohol. The distilled beverages are termed as hard liquor. Vodka, whisky, rum, gin is
included in the distilled beverages.

The effects of alcoholic beverages on health:

Alcohol consumption causes dehydration and intoxication. The consumption of alcohol for long term might cause change in metabolism of brain
and liver and alcoholism. The intoxication of alcohol affects the brain, causing clumsiness, slurred speech and delayed reflexes. It might also cause
low blood sugar as insulin production stimulates on consumption of alcohol due to which glucose metabolism speeds up. High consumption of
alcoholic beverages is associated with an increased risk of malnutrition, liver disease, chronic pancreatitis, and cancer.

However, not all effects of alcohol intake are harmful. Alcohol intake in controlled amounts can help people to relax it helps in relieving stress and
loosen up the body. Certain amount of alcohol such as wine or beer every day prevents heart diseases. A moderate amount of alcohol by alcoholic
beverages are said to increase the good cholesterol in the body and reduces blood clotting. It also increases insulin sensitivity and coronary blood
flow.

The Alcohol concentration and servings:

The level of alcoholic beverages is stated as the proportion of alcohol by volume. The quantity of ml. of pure ethanol in 100 ml of beverage is
ABV (alcohol by volume). The servings of alcohol vary drastically from country to country. The single servings of vodka, gin, rum, and whisky
are 25 ml or 30 ml quantities or multiples. Beer is typically served in pints of 568ml. The standard drink contains specific amount of pure alcohol.

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Alcoholic Beverages Industry

Liquor Industry in India is one of the criticized Industries due its impact and side-effects on the consumer. Even this Industry gets lots of negative
publicity it is still growing faster and faster. Alcoholic beverage Industry was born with country liquor and now it has grown to Indian
Manufactured Foreign Liquor. Growth of this industry has touched life many Indian people by providing then with earning opportunities. Current
Indian society shows greater acceptance towards alcoholic beverages and this makes the outlook of the Industry very affirmative. Indian market
manufacturing works in various categories like IMFL (Indian manufactured Foreign Liquor), BII (Foreign liquor Bottled in India), BIO (Foreign
liquor Bottled in Origin), Beer, Wine and Country liquor. The market research shows that IMFL takes 65% value share amongst other alcoholic
beverages. Actually Beer, IMFL and Country liquor contributes equally to the Industry in terms of quantity. IMFL has costly which increases its
market contribution value to 65%. The growth rate of the alcoholic liquor Industry is around 8% per annum. The growth is more for cheaper
products as compared to IMFL products. If the prices are made higher the demand does not get affected but it gets transferred to cheaper products.

What are the trends making this Industry grow at the rate of 8% per annum?

1. Growth in the alcohol consumption by women in India.

2. Increase in Social acceptance of alcoholic beverages in society.
3. Production of attractive flavoured alcoholic beverages.
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Practicing innovative marketing techniques

Concentration on reaching more and more people.
Attractive packaging techniques.

This Industry is recession-proof with increasing consumers day by day. The market is growing per day creating more and more opportunities to
grow in Indian Economy.

Alcoholic Beverages Market Structure:–

The liquor Industry Market structure is improving at faster rate but still it is not 100% perfect. Every Industry must compare its own market
structure with the perfect market structure. This type of comparison will help industry to grow at specific direction. When the Alcoholic beverages
industry will learn where exactly it is lacking then efforts can be invested in that particular area. This will help this industry to reach its perfection
level. Here is comparison between perfect market structure and liquor Industry’s current market structure. There are some key points on which the
market structures can be compared and below are the details about the key points.

1. Consumers and Manufacturers – Perfect market scenario should contain unlimited number of Consumers and manufacturers. In Liquor
Industry there are numerous manufacturers in the market, but they are not unlimited. Even if you check the number of consumers of current
Alcohol Industry, it is still not infinite. This is the key point on which alcohol Industry should focus more. Is should invest time and money
to increase number of Consumers and Manufacturers
2. Hurdles in Entrance – In perfect market structure there are hardly any entrance or exit hurdles, but In the Indian liquor industry there are
many hurdles standing at both entrance and exit of new manufacturers. The majority of hurdles range from government regulations to
completion due to existence of established manufacturers in the market already.
3. Information of Industry – In perfect market structure both the manufacturers and Consumers have full knowledge about the production,
value, costing and effectiveness of the product. In Indian Alcoholic Beverages Industry manufacturers do have little bit of knowledge about
the production and related details but the consumer is in complete dark corner. The alcohol industry should focus on giving information
about the production, value, costing and effectiveness of their products to the end users.
4. Similarity of Products – In case of Perfect Market Scenario the product’s characteristics are same in case of all other manufacturers of the
same product. But in case of Alcohol Beverages Industry the quality as well as key characteristics of the product differs from one
manufacturer to other. If the industry focuses on this point then it will get good results in future.
5. Logical Consumers- This point is addressed by Alcohol beverages Industry in the same way as perfect markets. This means that consumers
select their product logically as per their need.
6. Single manufacturer – In case of the ideal market scenario a single manufacturer cannot be successful due to the huge competition
available in the market. This does not apply to the alcoholic beverages Industry. If the manufacturer is well establishes then it can leave a
huge impact on the consumers and he will get its fare share of success even in the presence of competitors.

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Government Policies:–
Every Industry is bounded by specific government rules and regulations. For some industries rules are very tough making it changing for the
Industries. The Indian Alcoholic Beverages Industry is also bounded by the government policies. Government has issued large number of rules for
this Industry making it bit challenging to grow. There are two different types of policies legal and economical.

Legal Policies by Government–

1. The Alcohol Industry is announced as state oriented Industry and hence every manufacturer requires a valid government licence
specific to the state of his business. This legal policy is very challenging for manufactures to grow across India.
2. According to the government policy different part of this industry needs different licence such as manufacturing units, bottling of the
liquor unit, product supply unit. Getting licence for each of this unit is tedious and makes it more challenging for anyone new to enter
in this Industry.
3. In this Industry Foreign Direct Investement of 100 percent amount is allowed. This is a positive rule for those who are looking for
foreign investments. Whenever company wants to increase the investment it has to take the government approval each and every time.
4. The Act 1956 is responsible for all the policies related to The Alcohol Industry.

2. Economical Policies by Government:–

1. The cost of the product is defined based on the economical policies. The taxations such as Excise duty, CST and VAT affects the
costing of the product.
2. As per the policies direct advertising of this Industry is banned and it is under control of government. The supply chain is also
managed by government.

Alcohol beverages Industry Market Scenario:-

The Indian alcohol beverages industry is an industry which is functioning with large number of challenges. The challenges are as a part of legal
and economical policies imposed by Government. Due to this the profit margins are becoming thinner and thinner. To work on such a thin margin
intern is the biggest challenge for this Industry.

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