Expensive molasses to raise liquor prices by 20%

Expensive molasses to raise liquor prices by 20%
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First Published: Sun, May 10 2009. 01 40 PM IST
Updated: Sun, May 10 2009. 01 40 PM IST
New Delhi: Tipplers may have to shell out extra pennies as molasses have become costlier by 75% in the past one year.
“Prices of low-end brands in India Made Foreign Liquor (IMFL) segment may go up by 15-20% in the next couple of months,” liquor retailing major Chadha Group CEO Raju Chadha said.
According to All India Distilleries Association (AIDA), molasses prices have increased to Rs6,500-7,000 per quintal which is about 75% higher than the prevailing price last April.
The total IMFL market in India is estimated at around 190 million cases per annum and the molasses-based liquor accounts more than 90% of it.
Another major player in the liquor industry, Radico Khaitan, said it is also looking at upward revision in the prices of some of its brands.
“Molasses based alcohol accounts for over 90% of the total liquor consumed in the country. We will have to revise the prices of our low end brands of IMFL, to offset the increase in the price of raw materials,” Radico Khaitan Ltd COO Raju Vaziraney said.
Meanwhile, UB Group promoted United Spirits Ltd, the largest liquor manufacturer in the country, was not available for comment.
The price hike would be prominent in the low-end brands because they operate at a low margin, while high end brands may be able to absorb the shock, Chadha said.
However, he said in case of country liquor, which is completely controlled by the government, there wouldn’t be any increase in the prices.
“Last year, molasses was available at about 4,000 per quintal. But with the shortage of sugarcane in the current season, the prices have gone up to Rs7,000,” AIDA director general B N Raina said.
He said alcohol prices have shot up to Rs28-29 a litre from Rs19-20 a litre last year. “Prices may go up further to Rs32 by the end of the current season,” he added.
However, according to the industry experts, foreign brands manufactured or bottled in India would not get affected by the increase in the prices of liquor.
“All of Diageo’s whiskies are grain based and none are molasses based. Masterstroke is not molasses based either and is a mix of premium Indian grain and scotch malt. Hence, a rise in the price of molasses will not have an effect on Diageo,” the company said.
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First Published: Sun, May 10 2009. 01 40 PM IST
More Topics: Molasses | Liquor | Prices | United Spirits | Economy |