However, Anand Kripalu says that some states are beginning to recognise the limitations of total prohibition and are gradually shifting towards more pragmatic, regulated consumption models
Highlighting that the persistent politically driven narrative around prohibition in certain states presents a notable business risk, Anand Kripalu, Chairperson of United Breweries, stated that high taxation and state-imposed controls on manufacturers’ pricing continue to pose significant challenges to business growth and profitability.
However, it is encouraging to observe that some states are beginning to recognise the limitations of total prohibition and are gradually shifting towards more pragmatic, regulated consumption models, Kripalu said in the company’s annual report.
“The company remains actively engaged with various state excise departments and relevant authorities in a proactive and collaborative manner. These efforts aim to mitigate the impact of adverse policy decisions, while advocating for equitable taxation, transparent distribution frameworks, and a conducive business environment,” the Chairperson added.
He added that it is encouraging to see several states, including Rajasthan, Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Assam, amongst others, adopting long-term, reform-oriented policies aimed at unlocking the true potential of the alcoholic beverages industry. Notably, Uttar Pradesh, with its significant market potential and progressive policy framework, has attracted Heineken’s first brewery investment into the State.
Kripalu noted that fluctuations in the availability, quality, or pricing of raw materials, packaging materials, commodities, and transportation, as well as monopolistic supply conditions can lead to shortages and/or increased input costs.
Highlighting that the domestic supply of new glass and cans remains constrained, he added that the company is engaging with both existing and alternative suppliers to build a more resilient and diversified procurement strategy for bottles and cans.
“The trend of premiumisation continues to gain momentum, driven by growing consumer demand for craft beers and flavourful, differentiated offerings. This shift has led to increased innovation across the category and the introduction of curated brands aimed at catering to evolving consumer preferences,” Kripalu stated.
The Indian beer market continues to demonstrate strong structural growth potential. Driven by a youthful population, increasing disposable incomes, rapid urbanisation, and evolving lifestyle preferences, beer is steadily emerging as the beverage of choice for a new generation of responsible consumers, he noted.
“Particularly in metropolitan areas and emerging Tier II cities, beer is gaining prominence as a socially consumed beverage. It is also steadily establishing itself as a preferred after-work choice among India’s corporate workforce, reflecting its evolving role in contemporary urban lifestyles,” the Chairperson highlighted.
He added that the future of the beer industry is exceptionally bright, offering immense potential and exciting opportunities.
