how profitable is liquor?

1. LIQUOR – A BILLION
DOLLAR BUSINESS
By
S. John Wilfred
MBA
CRESCENT BUSINESS SCHOOL

2. HOW IT ALL BEGAN
• Initially started out to be a pain reliever
• Eventually became a thing of addiction
• Various forms of alcoholic beverages came
into production
• Country sprit turned out to be highly
predominant in rural areas, plunging through
countless lives
• More than a fifth of alcohol produced in the
world is consumed by Indians

3. GOVT Vs PRIVATE
• In Tamil Nadu, Kerala and Delhi the govt. Has
everything under its control from wholesale to
retail so as to make sure no revenue is spilled
• Andhra Pradesh, Orissa, Bihar, Chattisgarh,
Rajasthan, Uttarakhand, Uttar Pradesh, Karnataka
and Bihar, governments run the wholesale
business, leaving retail to private players
• Maharashtra’s liquor business is in private hands

4. STATE’S COFFER
• Liquor amounts to a larger share of a state’s
revenue
• Tamil Nadu incurs Rs. 21,800 crore revenue
from liquor
• 20% of any state’s revenue is likely to come
from liquor industries
• Likewise in Kerala 22% of its total revenue
comes from bottle

5. • In Karnataka its 20% of state’s Excise revenue
• West Bengal’s Excise revenue in the last
financial year was Rs. 2,600 crore

6. DRINKING CULTURE
• Economic affluence, urbanisation, changing
lifestyles and social mores are all persuading
young people to take to drinking
• Indians’ drinking habits and patterns are
problematic
• At least a third of the drinkers fall in the
‘hazardous drinkers’ category
• NIMHNS study in Karnataka found that for every
rupee the government got off the bottle, it lost
more than Rs. 2 in terms of healthcare expenses.

7. PRICE RISE A SOLUTION?
• “Asking a daily-wage worker to pay 600 per
cent tax on his drink is cruel”.
• The government’s claim isn’t right.
• “No matter what the price is, the habitual
drinker will buy his drink. Only, the quantity of
food on his children’s table will shrink.”

8. GROWTH
• Indian liquor industry was expanding 30 per
cent year-on-year
• In 2015, liquor consumption is pegged to
touch about 20 billion litres
• The total value of spirits, wine and beer
consumed in India is projected to be in the
neighbourhood of Rs. 1.5 lakh crore in 2015

9. POSSIBLE SOLUTION
• Strong campaign and awareness programmes
• Removing liquor form its root (long term
process)
• Finding alternative ways to fill state’s coffer
like solar power production, bio fuel and
cutting down unnecessary expenses