India: Brewers request permission for partial resumption of brewing activities

Some of India’s top beer companies, led by industry body All India Brewers’ Association (AIBA), have made several representations to the Centre as well as the state governments requesting permission for partial resumption of brewing facilities, Livemint reported on April 13.

The AIBA, which represents brewers including United Breweries, Bira, Molson & Coors and Carlsberg, has in a letter to the commerce ministry appealed for gradual and partial resumption of operations at breweries, keeping intact social distancing and hygiene practices at the plants.

“We have written to the Centre and state governments that we employ many people in our sector. We have requested them to allow reopening of breweries albeit with all social distancing norms to be followed. We have requested reopening of retail liquor outlets in non-hotspot areas, not the bars or nightclubs, while following social distancing norms," said Shekhar Ramamurthy, AIBA chairman and outgoing chief executive officer and managing director, United Breweries Ltd, which makes the popular Kingfisher Beer.

AIBA, whose members operate more than 80 breweries in the country, has asked for relief and business continuity for the beer industry.

Through sales of beer, state governments generate more than ₹36,000 crore of tax revenue per year, in the form of excise duties and VAT, AIBA said.

The peak summer season has begun in India and for brewers, April to June contribute 35-40% of sales.

“We are staring at a situation where the entire season will get wiped out if restrictions are not lifted," said Ramamurthy.

Excise duty and taxes generated from the sale of alcohol, along with licence fee, contribute significantly to state revenues. Sale of alcoholic beverages accounts for 15-20% of the revenue of the states.

Partial opening up of industries could help states monetarily, in a situation where the government is dealing with a calamity that has huge economic implications, AIBA has argued.

Brewers have also urged the government to look at the feasibility of online sale of beer.

“This may be the moment to consider online sales while maintaining all the right methodology," said Ankur Jain, founder and CEO of B9 Beverages, which makes Bira beer.

12 April, 2020