India: Brewers seek partial resumption of operations and propose sale of beer through e-commerce

Leading beer companies United Breweries, Bira, Molson Coors, and Carlsberg, led by industry body All India Brewers’ Association (AIBA), have written fresh letters to chief minsters of eight states this weekend seeking partial resumption of brewing facilities and proposed sale of beer through e-commerce and home delivery platforms including Swiggy, Zomato, Amazon, Grofers and Flipkart, the Economic Times reported on April 27.

“COVID-19 has the potential to disrupt business for the rest of the year. It is imperative that state excise departments introduce policies that facilitate home delivery of beer, wine and alcohol,” the letters said.

AIBA, which has a member base of over 83 manufacturing breweries, proposed creating special licenses for private e-commerce and food delivery companies Flipkart, Amazon, Grofers, Zomato and Swiggy.
“Sale through e-commerce and home delivery will lead to reduced crowding at shops and ensure that beer sales and excise revenue is not impacted adversely,” the letters, signed by AIBA director general Shobhan Roy said.

State chief ministers the PM were scheduled to meet on April 27 to decide next steps on the lockdown.

“Stringent lockdown measures have brought our business to a complete standstill, especially in peak season of March-Junewhen almost 40% of the year’s sales and revenues are generated,” the letters addressed to chief ministers of states including Maharashtra, Goa, Kerala, West Bengal and Haryana, said.

The letters added that non-availability of beer and spirits has led to law order issues and sale of spurious alcohol, and called for re-start manufacturing initially at 50% capacity which would meet social distancing norms at the plants.

“Most of the key suppliers for beer including manufactures of bottles and cans, and packaging material suppliers are shared with other packaged food and beverage manufacturers and already have permissions to operate,” it said.

While the government has permitted opening of shops selling essentials, it has denied sale of alcoholic beverages in the ongoing lockdown.

AIBA said opening up licensed alcobev outlets will restart of revenue streams for states, and added that taxes from beer and alcohol sales contribute close to 35% of revenues for many states. “Total revenue generated for from sale of beer and alcohol is Rs 1.36 lakh crore. With disaster relief and healthcare expenditure increasing, it is imperative that states open beer and alcoholic beverages immediately to improve revenue collections,” it said.

The association drew a comparison to points of sale, stating that while 85,000 outlets are licensed by the government to sell beer, over 12 million outlets sell FMCG products. “It is relatively easy to maintain social distancing norms and operate the limited number of beer and alcobev stores in a manner which is fully compliant with the government’s Covid-19 guidelines,” it said.

AIBA also said the beer industry directly or indirectly employs over 7.5 million people many of whom are daily wagers.

28 April, 2020