While Mumbaikars like their liquor strong, state is tipsy on beer

When it comes to their tipple, Mumbaikars like it strong.

In 2018-19, beer sales in Mumbai city and the suburbs dipped by 5.24% and 1.34% respectively compared to the previous year, to end at 193.53 lakh bulk litres (LBL) and 561.25 LBL. However, the growth in consumption of Indian Made Foreign Liquor (IMFL) was highest at 2.66% in the city (125.33 LBL) and 7.41% in the suburbs (292.47 LBL). In 2017-18, the sales figures were at a lower 122.08 LBL and 272.30 LBL.

While the sales of country liquor (CL), which is consumed by the toiling classes, showed tepid growth at 0.21% and 1.88% respectively, to end at 103.98 LBL and 262.06 LBL versus the last financial year's 103.76 LBL and 257.22 LBL, the rise in consumption of wine was also incremental at 0.41% and 6.50%.

In 2018-19, sales of wine, which is considered an aspirational drink, in Mumbai and suburbs was 6.94 LBL and 18.08 LBL as against the previous fiscal's 6.91 LBL and 16.98 LBL.

Mumbai's liquor consumption trends diverge from the sales patterns for the state. In Maharashtra, during the 2018-19 financial year, sales of wine rose the highest at 22.12%, followed by IMFL (15.89%), country liquor (12.02%) and beer (8.26%).

"The sales of beer have been affected by a high excise duty regime. Duties on beer were hiked in 2017, which led consumers to move towards harder drinks. In 2014-15, the sale of beer in Maharashtra was around 32 LBL, but the hike in duties has led to a gradual de-growth or tepid rise in volumes over the years," he explained.

In January 2019, the state government hiked the excise duty on spirits, which covers alcoholic drinks like whiskey, gin, rum and brandy, to generate more revenues for the department.

The official said that the rise in sales in Maharashtra vis-a-vis Mumbai could be explained by the impact of the Supreme Court's ban on liquor vends within 500 meters of state and national highways from April 1, 2017, to reduce drunk driving and road fatalities. This impacted sales in 2017-18 as the ban had initially covered 15,699 licenses (61.53%) of the 25,513 retail liquor vending licenses in Maharashtra. However, the ban had little impact in Mumbai, which left sales largely unaffected.

The ban was gradually diluted, and now, just around 2,255 retail vends are shut. This led to higher sales in the present fiscal.

"Despite the ban, illegal sale of liquor continued. However, it was tough to sell beer through this route as consumers prefer it to be chilled and bootleggers at times, found it tough to arrange these facilities," he explained.

Liquor industry sources attributed the fall in beer sales to the excise duty increase, which led to consumers, who are at the lower end of intoxication, shifting to higher-end CL or entry-level IMFL brands. The purchasing power of people had also reduced post-demonetisation.

In 2017-18, country liquor sales fell 4.02% to end at 3,126.09 lakh BL compared to 3,256.99 BL in 2016-17. Consumption of Indian Made Foreign Liquor (IMFL) and beer also dipped by 6.81% and 15.05% to end at 1,792.56 lakh BL and 2,759.68 lakh BL versus 1,923.56 lakh BL and 3,248.43 lakh BL. Wine sales were 62.50 lakh BL, a fall of 3.28% compared to 64.62 lakh BL in the previous year.

Maharashtra follows a policy of discouraging liquor consumption through high prices and low sales and has one of the highest excise duty regimes in India.

However, neighbouring states and union territories like Goa and Daman have comparatively liberal policies and the cheaper costs of liquor there is a huge incentive for smugglers and bootleggers to smuggle in the brew to Maharashtra. With neighbouring Gujarat under prohibition, Maharashtra has also become a transit point for transporting liquor from states like Haryana and Madhya Pradesh to the dry state.