Delhi low on spirits even as G20 nears

New Delhi: Six months after the Delhi government reverted its alcohol policy to a system operated by state vendors, supplies of popular alcohol brands are running low, a critical challenge ahead of G20 meetings and ICC World Cup cricket matches that are set to attract global audiences.

The biggest drop has been in the supply of Kingfisher beer. Also, AB InBev, which had a 20% market share through private vendors in 2022, is down to nearly zero.

Questions mailed to a spokesperson for United Breweries, the owner of Kingfisher brand, on its scaled-back supply were not answered as the company is in a so-called silent period before the earnings announcement.

However, with many drinkers driving up to neighbouring states for their favourite beer, AB InBev brands Budweiser, Magnum, Corona, and Hoegaarden continue to have a 20% share in Haryana and a 15% share in Uttar Pradesh.

Kartikeya Sharma, president of AB InBev India, said, “We look forward to policy stability in the important market of Delhi and would continue to seek a level playing field across the alcohol vends. Retail outlets or off-trade availability and share of our premium brands are totally divergent to our wide availability in the on-trade in hotels, restaurants, bars and clubs in the city.”

When the city’s new excise policy was scrapped in September, it was decided that only state-led enterprises could own alcohol vends in the capital. While sales of Indian-made foreign liquor, or IMFL, have improved this year compared with last year’s, there has been a shift in portfolios—away from some premium brands and price segments.

“Availability is an issue. Delhi had 843 outlets. As it is, the retail universe for a city of this size was the lowest, and now that number is further reduced,” said Nita Kapoor, CEO of the International Spirits and Wines Association of India.

“Only about 330 outlets of the current 550-odd outlets were earmarked for keeping premium products. But now that number is down to about 150 outlets. Brands are facing a problem of availability, and it is acute.”

The association represents companies such as Bacardi, Beam Suntory, Brown-Forman, Campari Group, Diageo-United Spirits, Moet Hennessy, Pernod Ricard and William Grant and Sons.

The policy about-turn has seen private operators pushed out by Delhi-government-owned institutions such as Delhi State Industrial and Infrastructure Development Corp. (DSIIDC), Delhi Tourism and Transportation Development Corp. (DTTDC), Delhi Consumer’s Cooperative Wholesale Store (DCCWS) and Department of Delhi State Civil Supplies Corporation (DSCSC).

Many top-level executives at alcohol firms said on the condition of anonymity that they are finding it difficult to deal with these government entities.

Additionally, the current regime requires Indian brands to shell out as much as ₹25 lakh to register a brand they want to sell in the city, as compared with ₹1 lakh per brand and a label registration fee of ₹5,000 in the earlier system. Foreign liquor companies also have to pay an additional duty for “bottled in origin” or BIO brands to operate in Delhi with an L1-F licence (for foreign-made liquor). They also pay a brand fee of ₹15 lakh for whiskey and ₹7 lakh for imported beer.

Many Indian companies refrained from registering their premium brands because the government was charging for the entire 12 months although just seven months were left in the existing alcohol policy.

Some companies have claimed that there is a delay in receiving excise dues of up to 20 days as compared with about two to three days two years ago, impacting sales.

The hurdles have seen French alcohol major Pernod Ricard disappear from Delhi—it is impossible to find its popular brands Chivas Regal, Ballantine’s, Royal Stag and Blender’s Pride.

“Many outlets are small, and as a result, their stocking ability is less. Many vends also don’t have enough chillers to keep beer cold,” said Vinod Giri, director general of the Confederation of Indian Alcoholic Beverage Companies.

“Excise duties are supposed to be remitted by the departments within three days of supply. However this is getting delayed inordinately, resulting in funds blockade leading to low dispatches from factories,” said Prem Dewan, chairman and managing director of Devans Modern Breweries, the maker of Godfather beer.