Home >Industry >Retail >Covid-19 taxes prompt tipplers to go for cheaper, local alternatives: Survey

Coronavirus taxes slapped by several states on alcohol purchases are driving consumers to opt for cheap liquor and local brands, according to a recent survey by social media and community platform LocalCircles.

The survey, conducted over the last two weeks, suggests that in Telangana, Rajasthan and West Bengal, which have imposed an additional coronavirus cess or hiked taxes, consumers are buying less and, when they do, are opting for cheaper options.

Consumers in these states are also comfortable switching to online delivery of alcohol as they want to avoid crowded shops, according to the findings of the survey conducted with more than 25,000 respondents.

“The regular or the lower end segment of alcohol beverages has been the most impacted. The daily wage labourer or migrant worker has very little money and plenty of uncertainty. So, they are moving down to country liquor or temporarily not drinking," said an executive at a liquor company, speaking on the condition of anonymity.

“Liquor sales volumes of states are falling as consumers say they are buying less than their usual quantity due to increased prices. This phenomenon might lead to reduced tax collections for the states," LocalCircles said.

The industry is staring at huge losses as restaurants and bars, which account for 15-20% of alcohol sales, remain largely shut.

Consumers surveyed by LocalCircles said they would buy more alcohol if states lowered the covid tax.

In their response, 45% respondents of Telangana, 36% respondents of West Bengal and 67% residents of Rajasthan agreed to buying more if state governments were to remove or significantly reduces the virus cess.

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