Indian Alcohol Sales See Mixed Results Amidst Rain, Taxes, and Policy Shifts

Consumer Products

Updated on 03 Nov 2025, 01:10 pm

Reviewed By

Aditi Singh | Whalesbook News Team

Short Description :

Indian alcohol sales faced a mixed September quarter. Heavy rains dampened beer and beverage demand, impacting companies like United Breweries. Conversely, higher taxes and new policies in states like Karnataka, Telangana, and Maharashtra created challenges for United Spirits and Sula Vineyards. However, policy changes in Andhra Pradesh drove growth, while companies increasingly focus on premium segments and exports to offset headwinds. The outlook remains cautious due to ongoing taxes but may improve with gradual demand recovery.

Indian Alcohol Sales See Mixed Results Amidst Rain, Taxes, and Policy Shifts

▶

Stocks Mentioned :

United Breweries Limited

Radico Khaitan Limited

Detailed Coverage :

The September quarter presented a varied picture for alcohol sales in India. Persistent heavy rainfall and an extended monsoon season negatively impacted demand for beer and other beverages, leading to a 3% year-on-year decline for United Breweries. The company also faced issues with flooded breweries, forcing reliance on contract manufacturers.

Major states like Karnataka, Telangana, and Maharashtra imposed significant headwinds. Karnataka and Maharashtra increased excise duties. Maharashtra's "Maharashtra Made Liquor" (MML) policy negatively affected mass-market spirits, prompting United Spirits to raise prices by 30-35%. In Telangana, impending liquor license renewals led to a nearly 20% business decline for United Breweries and impacted Sula Vineyards' performance.

Despite these challenges, some states offered positive developments. Andhra Pradesh saw substantial volume growth, with Radico Khaitan reporting an almost 80% jump in mass brand volumes following the shift to private retail outlets. Meghalaya experienced a sales surge after reducing excise duty on beer.

Companies are adapting by focusing on premium segments and export markets. United Breweries noted a 17% rise in high-end beer sales, and Radico Khaitan's revenue grew nearly 34%, driven by strong performance in its prestige and luxury brands.

Outlook: High taxes in key states are expected to keep prices elevated. Competition from cheaper local brands in Maharashtra may increase. However, gradual improvement in consumer demand and discretionary spending could support sales. Unpredictable weather remains a risk.

Impact: This news directly affects the revenue, profitability, and stock valuations of companies in the Indian alcoholic beverage sector, highlighting regulatory risks and consumer demand trends. Rating: 7/10.

Difficult Terms: Excise Duties: Taxes levied by the government on the production or sale of specific goods, often considered non-essential. Discretionary Spending: Money consumers can choose to spend on non-essential goods after covering necessities. Contract Manufacturers: Third-party companies hired to produce goods for another company. Mass-Market Spirits: Lower-priced alcoholic beverages targeted at a broad consumer base. Indian-Made Foreign Liquor (IMFL): Spirits manufactured in India but imitating foreign liquor brands. Maharashtra Made Liquor (MML): Locally produced liquor promoted by the Maharashtra government. Premium Brands: Higher-priced alcoholic beverages offering better quality or exclusivity. Volume Growth: An increase in the quantity of goods sold. GST: Goods and Services Tax, a comprehensive indirect tax.