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High Taxation pushing India’s alcohol industry on brink of crisis: ISWAI
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Friday, 16 December, 2022, 14 : 00 PM [IST]
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Our Bureau, New Delhi
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The International Spirits & Wines Association of India (ISWAI), the apex body of the premium AlcoBev sector, expresses its concern on the ‘High Taxation of AlcoBev Industry’ which is threatening the future of the Indian alcoholic beverages market. Taxation accounts for 67%-80% of AlcoBev product prices, leaving little for suppliers and trade to sustain and manage their operations.
Nita Kapoor, CEO, ISWAI, said, “The Indian AlcoBev industry is in deep crisis due to the 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. The liquor industry has historically contributed 25%-40% 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 added.
The Indian AlcoBev industry employs 1.5 million people and has an estimated market size of $52.5 billion (2020), which is the ninth-largest in the world.
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