The International Spirits & Wines Association of India (ISWAI) has called on state governments to adopt an inflation-based pricing model for alcoholic beverages, citing a substantial rise in raw material costs.
According to ISWAI CEO Nita Kapoor, industry margins have contracted, leaving very little for trade and manufacturers, with state governments claiming 60-80 per cent of the share. Kapoor emphasised the need for a transparent, data-driven inflation-based pricing model to ensure the industry’s sustainability.
The association also urged the rationalization of excise duties imposed by some state governments, as they prioritize revenue collection, which may hinder volume growth. Kapoor highlighted the significant increase in raw material prices, including extra neutral alcohol (ENA) and packaging materials, between 2018 and 2024.
The fear of volume loss prevents state governments from revising the Maximum Retail Price (MRP) of liquor, which currently contributes significantly to their revenue. Kapoor emphasised that an inflation-based pricing model is essential for the industry’s survival, as it contributes 2 per cent to the GDP.
ISWAI anticipates a polarized growth in the alcoholic beverage segment, with a faster pace in premium products priced above Rs 900 to Rs 1,000 per 750 ml bottle. Kapoor expects the industry to grow by 2 to 3 per cent by the end of the year, reaching an estimated USD 63 billion in the next 3 to 4 years.
Regarding the competition between global and Indian brands, Kapoor welcomed the growth of domestic brands, stating that there is room for everyone in the market. ISWAI members include leading global spirits and wine companies, such as Bacardi, Diageo, Pernod Ricard and others.
On the Free Trade Agreement (FTA) negotiations between India and the UK, Kapoor mentioned that the industry has presented its representation, leaving the decision to the respective governments.
