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India's AlcoBev apex body concerned about high taxation

ISWAI CEO Nita Kapoor said in a statement that the sector is in deep crisis due to the inflation on one hand and high taxation on another
Last Updated 17 December 2022, 10:51 IST

The International Spirits and Wines Association of India (ISWAI), the apex body of the premium AlcoBev sector, has expressed concern on the high taxation on the industry, claiming that it is threatening the future of the beverages market.

According to the association, taxation accounts for 67 per cent-80 per cent of AlcoBev product prices, "leaving little for suppliers and trade to sustain and manage" their operations.

ISWAI CEO Nita Kapoor said in a statement that the sector is in deep crisis due to inflation on one hand and high taxation on another.

"Unless swift action is taken to reverse the situation by decreasing taxes or increasing the product prices, India could soon be facing a situation that will be akin to killing the proverbial golden goose. Every manufacturer --from automobile to pharmaceuticals-- have raised prices, but the AlcoBev industry has been crippled because of lack of pricing freedom,” she said.

She said the liquor industry has historically contributed 25 per cent-40 per cent of revenues for state governments, but higher taxes without price hikes is pushing the industry into a crisis.

"While India has a comparative advantage in production because of the ready availability of raw materials like molasses and grains, the country needs to rehaul its policies that will encourage greater production of volumes for exports," she said.

ISWAI Secretary General Suresh Menon said gross margins for makers of Indian Made Foreign Liquor during the quarter ended September were lower compared to the same period a year ago due to higher cost of ingredients.

ISWAI estimates that alcoholic ingredients such as Extra Neutral Alcohol (ENA) and Barley are 12 per cent and 46.2 per cent more expensive than last year, while the cost of packaging material such as glass and mono cartons rose by 24.9 per cent and 19 per cent respectively, he said, adding the paring of taxes at both central government and state government would also go a long way in helping the beleaguered AlcoBev manufacturers in the country.

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(Published 17 December 2022, 10:51 IST)

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