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Tequila in india

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A glimpse of the Indian liquor industry.

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  • Excellent Presentation

    Can you advise as to the current retail price for Tequila in India? Thanks in advance.
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  • Very interesting thanks.
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Tequila in india

  1. 1. Tequila in India Bringing tequila to the country Rahul.Ajit.Advisory
  2. 2. Presentation Flow Rahul.Ajit.Advisory
  3. 3. Industry Overview <ul><li>Bringing Tequila to the country </li></ul>Rahul.Ajit.Advisory
  4. 4. Indian Beverage Consumption Rahul.Ajit.Advisory
  5. 5. Indian Alcoholic Drinks Market Rahul.Ajit.Advisory
  6. 6. Indian Alcoholic Drinks - Types Rahul.Ajit.Advisory
  7. 7. Indian Market: A snapshot Rahul.Ajit.Advisory
  8. 8. Indian Market: A snapshot Rahul.Ajit.Advisory
  9. 9. Indian Market: A snapshot Rahul.Ajit.Advisory
  10. 10. Indian Spirits Market (IMFL) Rahul.Ajit.Advisory
  11. 11. IMFL market by category Rahul.Ajit.Advisory
  12. 12. Market Shares in IMFL Rahul.Ajit.Advisory
  13. 13. IMFL Imports over the years Rahul.Ajit.Advisory Kilolitres (KL) per annum
  14. 14. Break up of IMFL Imports Rahul.Ajit.Advisory
  15. 15. But…… <ul><li>According to an IWSR study, the growth in all categories of spirits sales should reach 141.6% in the period between 2004 and 2013, reaching a total value of USD12.4 MN. </li></ul><ul><li>A significant number of consumers are now opting for non-traditional spirits like Tennessee whiskey and flavoured vodka. </li></ul><ul><li>Niche segment drinks like tequila have also got many takers, with the market for tequila in India growing at 25 % a year, and projected to grow by at least ten times over the next ten years. </li></ul><ul><li>In spite of white spirits commanding only a small percentage of the market in India , the tequila market is about 30,000 cases a year . </li></ul><ul><li>According to a study by Vinexpro/IWSR, Tequila consumption should grow the most between now and 2013 . </li></ul>Rahul.Ajit.Advisory
  16. 16. And…. <ul><li>In its first 18 months of marketing in India, Cuervo saw a sales jump from 1,500 cases to 10,000. </li></ul><ul><li>Cuervo's sales to India are above those to the Middle East , and close to Australia (32,000) and New Zealand (15,000). </li></ul><ul><li>It is now setting itself to sell 50,000 cases by 2010. </li></ul><ul><li>The estimated future demand for premium Tequila in India is about 250,000 cases, according to Sultania Trade Private Limited, the Indian distributor of VoodooTiki Tequila. </li></ul><ul><li>VoodooTiki is aiming to capitalize on the fledgling market for premium spirits, and are already seeing a great response in India, according to Donna Tadeo, President of VoodooTiki. </li></ul>Rahul.Ajit.Advisory
  17. 17. A word of caution? <ul><li>&quot;The tequila market in India is too fledgling and undefined to really put in any reliable numbers. There are only third party assessments.” </li></ul><ul><li>- Sanil Manocha, </li></ul><ul><li>Joint CEO of Two Friends </li></ul><ul><li>Marketers of niche products </li></ul>Rahul.Ajit.Advisory
  18. 18. Yet…. <ul><li>are all in India….. </li></ul>Rahul.Ajit.Advisory
  19. 19. Socio Cultural Differences: Tequila?! <ul><li>Bringing Tequila to the country </li></ul>Rahul.Ajit.Advisory
  20. 20. Tequila! <ul><li>Tequila is a blue agave–based spirit made primarily in the area surrounding the city of Tequila, 65 kilometres (40 mi) northwest of Guadalajara, and in the highlands ( Los Altos ) of the western Mexican state of Jalisco. </li></ul><ul><li>Mexican laws state that tequila can be produced only in the state of Jalisco and limited regions in the states of Guanajuato, Michoacán, Nayarit, and Tamaulipas. </li></ul><ul><li>Mexico has claimed the exclusive international right to the word &quot;tequila&quot;. </li></ul><ul><li>Over the last few years, sales of ultra-premium and super-premium tequilas have skyrocketed, increasing by close to 30% worldwide. </li></ul>Rahul.Ajit.Advisory
  21. 21. Types of tequila Rahul.Ajit.Advisory
  22. 22. Socio Cultural Differences Rahul.Ajit.Advisory Drinking Practices Mexico India Most commonly consumed alcoholic beverages Beer, tequila, rum, 96-percent proof alcohol, pulque, wine, and mezcal Arrack, palm wine, beer, and imported liquors Drinking predates European contact Yes, especially pulque consumption as part of traditional rituals and customs Yes, but not particularly central to social life Women’s drinking patterns Majority (about 63%) abstinent Predominantly (about 95%) abstinent Men’s drinking patterns Those who drink tend to drink rather frequently and often heavily Highly variable across regions
  23. 23. Socio Cultural Differences Rahul.Ajit.Advisory Drinking Practices Mexico India Context of drinking occasions Is an aspect of social family life passages, fiestas and, for some drinkers, part of daily life No regular context established; thus far, not a part of regular daily life or ritual occasions Evidence of concerns about young people’s drinking Definitely increasing Increasing Extent of major concerns about alcohol-related problems Considerable concern about drinking among men; drinking is seen as having major consequences for health and job performance Increasing problems seen in health, social, and economic areas
  24. 24. Legislation <ul><li>Bringing Tequila to the country </li></ul>Rahul.Ajit.Advisory
  25. 25. Import Procedures Rahul.Ajit.Advisory
  26. 26. Documents Rahul.Ajit.Advisory
  27. 27. Quotas and Import Restrictions <ul><li>There are no quotas on imports of alcoholic beverages in India. </li></ul><ul><li>India monitors imports of approximately 300 items that are considered to be sensitive. </li></ul><ul><li>Alcoholic beverages are included in this list of sensitive imports, which is monitored by a committee chaired by the Secretary of the Department of Commerce. </li></ul><ul><li>The monitoring mechanism was set up after quantitative restrictions on imports were removed in 2002. </li></ul>Rahul.Ajit.Advisory
  28. 28. Import Duties Rahul.Ajit.Advisory
  29. 29. Import Duty Rates Rahul.Ajit.Advisory Product Applied Tariff (or Basic Duty) Other Duties Effective Duty Wine / Beer (CIF value up to USD 25 per case*) 100% 75% additional duty 4% special additional duty 264% Wine / Beer (CIF value greater than USD 25 but less than USD 40 per case) 100% 50% additional duty (min US$37 for applied tariff plus additional duty) 4% special additional duty 212% Wine / Beer (CIF value greater than USD 40 per case) 100% 20% additional duty (min USD 40 for applied tariff plus additional duty) 4% special additional duty 149.6%
  30. 30. Import Duty Rates Rahul.Ajit.Advisory Product Applied Tariff (or Basic Duty) Other Duties Effective Duty Spirits (CIF value less than USD 10 per case) 166% 150% additional duty (min USD 40 for applied tariff plus additional duty) 4% special additional duty 591.6% Spirits (CIF value more than USD 10 but less than USD 20 per case) 166% 100% additional duty (min $40 for applied tariff plus additional duty) 4% special additional duty 453.28% Spirits (CIF value more than USD 20 but less than USD 40 per case) 166% 50% additional duty (min USD 53.20 for applied tariff plus additional duty) 4% special additional duty 315% Spirits CIF value of more than USD 40 per case) 166% 25% additional duty (min USD 53.20 for applied tariff plus additional duty) 4% special additional duty 245.8%
  31. 31. Excise Duty and other Taxes <ul><li>Every state charges varying state excise duty (varies 30 percent to over 100 percent) and sales tax and vending fee. </li></ul><ul><li>The state excise policy is reviewed annually, and the State Excise Department monitors and implements the excise regulations. </li></ul><ul><li>The state governments heavily depend on revenues from the liquor industry - in most states this accounts for over 10 per cent of total state tax revenues, whilst in the Punjab this accounts for over one third. </li></ul><ul><li>Sales tax (ad valorem), Bottling Fee, Litre Fee, Vend Fee, Gallonage Fee, Privilege Fee, Import/ Export Pass duty etc may also be charged. </li></ul>Rahul.Ajit.Advisory
  32. 32. Regulations <ul><li>Import of liquors including wines is allowed under the Open General Licence (OGL). </li></ul><ul><li>However, each label, each size of bottle and each manufacturer has to be registered with the Department of Excise & Customs against a fee. </li></ul><ul><li>All together it is a cumbersome procedure, which the agents/distributors/importers have to complete before importing liquor. </li></ul><ul><li>Every state (29 in number) and Union Territory (8 in number) has its own excise policy on the manufacturing and marketing of alcoholic beverages that includes warehousing, distribution, retailing, and labelling and disclosure requirements. </li></ul>Rahul.Ajit.Advisory
  33. 33. Regulations <ul><li>In several states, the importer/distributor either has to apply for a foreign liquor marketing license (FL-1 license) to the state excise department or market his liquor through an approved FL-1 licensed distributor. </li></ul><ul><li>For the FL-1 license, the licensee must have a registered office in the state and meet other requirements that may vary from state to state. </li></ul><ul><li>The FL-1 licensee has to pay a fixed fee every year. </li></ul><ul><li>The FL-1 licenses (importer or distributor) have to apply for the brand (and label in some cases) registration with the state excise department for marketing the brand/label in the state. </li></ul>Rahul.Ajit.Advisory
  34. 34. Regulations <ul><li>The state excise department charges a fixed registration fee, and the registration has to be renewed every year. </li></ul><ul><li>At the time of registration, the state excise department provides guidelines on specific labelling requirements for sale. </li></ul><ul><li>State specific labelling regulations may include: </li></ul><ul><li>1. “Alcohol Consumption is Injurious to Health‟ in English (and local language in some states) </li></ul><ul><li>2. “For Sale in the state of xxxxxxx only‟. </li></ul><ul><li>3. “Maximum Retail Price Rs. xxx.xx only”. </li></ul>Rahul.Ajit.Advisory
  35. 35. Regulations <ul><li>Upon registration of the brand, the licensed wholesaler/distributor can market their product in the state, either through government approved retail outlets or hotels and restaurants that have license to serve liquor. </li></ul><ul><li>Upon receiving an order from a buyer (hotel or retailer), the licensed wholesaler/distributor places a request for a transport permit or order with the excise department to allow transfer of the specified quantity (no of bottles/ cases) of the product from the custom bonded warehouse to the retailer/hotel. </li></ul>Rahul.Ajit.Advisory
  36. 36. Regulations <ul><li>The state excise department will issue the transport permit after receiving the payment of state excise duty, vend fee, and other taxes as applicable in that state. </li></ul><ul><li>Upon presentation of the transport permit, the bonded warehouse will release the specified quantity of liquor to the retailer/hotel and the licensed distributors will transfer the product to the retailer/hotel after paying the sales (value added) tax. </li></ul>Rahul.Ajit.Advisory
  37. 37. Maharashtra State Policies <ul><li>To view the Import Export Rules for Maharashtra State, please click here . </li></ul><ul><li>To view the procedure to Import Foreign Liquor into Maharashtra State, please click here . </li></ul><ul><li>To view the contact details of the Commissioner of State Excise (Maharashtra), please click here . </li></ul><ul><li>To view the website for the Department of State Excise of Maharashtra, please click here . </li></ul>Rahul.Ajit.Advisory
  38. 38. Conclusion <ul><li>Bringing Tequila to the country </li></ul>Rahul.Ajit.Advisory
  39. 39. Scope for Tequila <ul><li>India is characterized by tremendous cultural variability with respect to beliefs and practices regarding alcoholic beverage consumption. </li></ul><ul><li>The country is experiencing changes in the traditional family structure, a weakening of informal cultural and religious controls on alcoholic beverage consumption, and increasing contact with drinking practices outside Indian society. </li></ul><ul><li>Tequila is the in-thing with India's growing population of young drinkers and it's only recently that the consumer is getting a taste of the range of a product. </li></ul>Rahul.Ajit.Advisory
  40. 40. Scope for Tequila <ul><li>Hornitos and Tres Generaciones, the Mexican top-seller, El Jimador and Patró have a promising market in India, with the Taj seeking to stock them. </li></ul><ul><li>However, casualty rate in the premium segment is very high, and it is very important for any company to establish its brand well in this nascent market, as people drink brands and not alcohol. </li></ul><ul><li>In spite of the significant beaurocratic hurdles, India is a highly attractive market for Tequila manufacturers. </li></ul>Rahul.Ajit.Advisory
  41. 41. ¡Muchas gracias! <ul><li>Thank you very much! </li></ul>Rahul.Ajit.Advisory

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