Economic slowdown: Liquor market sees dip in sales

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India's biggest liquor firm, United Spirits Limited is facing "big-time liquidity crunch" as it wants to minimise its credit risk. 

USL, which sells brands like McDowell's and Johnie Walker is no longer doing aggressive sales due to liquidity crunch, according to the Economic Times report. 

The liquor company are afraid of traders stocking the products but not being able to pay the products. Anand Kripalu, managing director at USL, told investors, “This time the reality is, there are real liquidity issues in the marketplace with the trading community. So, if you supply, they will take the stock, but it’s at your peril.”

He said that they sell the product but find hard to collect the debt. 

USL reported volume growth of just 1 per cent year on year in quarter 2 of 2019 due to slowdown in consumer demand along with liquidity challenges. The company had posted 10.3 per cent volume growth a year ago, according to the ET report. 

Pernod Ricard, the biggest rival to USL, also had a dip in its growth from 34 per cent last year to 31 per cent this year in the same quarter. 

Last year the liquor market had grown by 12.9 per cent in the same quarter. 

 

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