India: Brewers stress out strong need to delink beer from hard spirits as far as levying taxes is concerned

Indian beer makers have demanded that all the state governments should delink the beverage from hard alcoholic liquors as far as levying taxes is concerned, New Indian Express reported on February 22.

All India Brewers Association Director-General Shobhan Roy said the current policies pertaining to alco-bev sector in India are driving people towards consumption of hard spirits.

"There is a strong need to delink beer from hard spirits and rationalisation of taxes as per actual alcohol content to bring a slow but definite change in consumption pattern. Just like other parts of the world, the emphasis will then shift to not only controlling consumption but to reducing intake of more hard spirits," Roy said in a statement.

Additionally, the reach of low alcoholic beverages needs to improve keeping social objectives in mind and it is imperative to create better retail environment with focus on having beer only at outlets/restaurants and rationalise the number of outlets to commensurate with population, he said.

"It is time beer should be delinked from hard liquor in terms of perception, taxation, availability and distribution," he said.

The consumption of alcoholic beverages in the country has been historically skewed towards hard liquor (spirits and country liquor) as against low alcoholic beverages such as beer and wine, the statement said.

Claiming that beer has much lower content of alcohol compared to Indian-made foreign liquor (IMFL) and country liquor, the AIBA said its "moderate consumption" as against other forms of alcohol products may lead to reduction in the level of intoxication and hence positive societal impact.

"Current policies of individual state governments are indiscriminately aimed at raising revenues from the alcoholic beverage sector without differentiating the categories of low alcoholic beverages. These policies overlook social needs and objectives and are thus driving people to consume hard liquor," it said.

In Telangana, 515 lakh cases of IMFL are sold annually as against 500 lakh cases of beer. In terms of absolute alcohol, 1,983 lakh litres of IMFL and just 234 lakh litres of beer is being consumed annually, AIBA said.

The AIBA further said there is only one outlet for 18,000 people compared to 300 in China.

Most of the countries in the world, except India, recognise that there are essential differences between high alcohol content drinks and lower alcohol content drinks like beer and therefore, spirits are taxed at a significantly higher rate.

The world over, beer accounts for 80 per cent of the market where as in India it is a meagre 35 per cent and on absolute alcohol content basis it is less than 18 per cent, it said.

24 February, 2016