Delhi govt's new excise policy consumer-friendly, says Diageo
The new excise policy will enable access to quality brands for younger consumers in safe environments and give consumers access to more private liquor vends, said a top executive at the company
New Delhi: India’s top liquor company Diageo that sells popular brands such as Smirnoff and McDowell’s No. 1 welcomed the Delhi government’s recent move to lower legal drinking age in the capital. The new excise policy announced Monday will enable access to quality brands for younger consumers in safe environments and give consumers access to more private liquor vends, said a top executive at the company.
“Diageo India welcomes the progressive excise policy reforms announced by the Delhi Government yesterday. The new excise policy keeps the consumer at its heart, enabling their access to good quality brands in significantly safer and enhanced purchase and consumption environments. We welcome the many consumer-friendly measures including bringing the legal drinking age in Delhi at par with neighbouring states, introduction of “age-gating" at restaurant & bars, equitable geographic spread of retail outlets in the state and 100% private retail," Anand Kripalu, MD & CEO, Diageo India.
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The government’s mission to tackle the scourge of illicit liquor trade will ensure safety of citizens while minimizing revenue losses of the government, he said.
On Monday, Delhi’s deputy Chief Minister Manish Sisodia announced a new excise policy that lowered the legal drinking age from 25 to 21. “Permissible drinking age lowered to 21, at par with Noida, UP," AAP announced on social media platform Twitter after the Delhi cabinet approved the New Excise Policy.
The government also announced that no new liquor shops will be opened in the city while adding that it will not run liquor stores in the capital. “There will be no government liquor stores in Delhi. No new liquor shops will be opened in the national capital," Sisodia said.
The city contributes to 4% in volumes for spirits makers; while for beer, 5% of volumes come from the capital, said Karan Taurani of Elara Capital.
The Delhi government’s move to also exit ownership of liquor stores will lead to proliferation of private outlets, said analysts. Roughly 60% of the around 850 liquor vends in the capital are run by the Delhi government. “Increase in private outlets will lead to larger brands gaining traction," Taurani added.
In an earlier note, Taurani had said the draft Delhi state excise policy, if announced in current context, is favourable for the larger brands in the industry versus smaller players. "However, the benefit for Diageo India is restricted as Pernod and Allied Blenders and Distillers have a stronger presence in this marker; USL’s advantage is only limited to McDowells no.1 where it has a strong recall versus competition," he said.
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