Trade deal: US whiskey, wine unlikely to give headache to Indian cos

NEW DELHI: Duty concessions to American whiskey and wine are unlikely to have any major impact on Indian companies. To begin with, it will come with a minimum import price which was the case with Australian, European and the UK trade deals. Besides, the volumes are very low, reports Sidhartha.

For instance, with total sales of 2,29,000 cases of nine-litre bottles, American whiskey accounted for less than 0.1% share of the Indian whiskey market, dominated by Indian players. Scotch (over 3%) and Irish (under 0.2%) have a bigger share of the pie.




"Most Bourbons and Tennessee whiskies have distinct darkish colour and stronger flavours, which like single malt whiskies, appeal to a more discerning palette and less so to the majority of premium whiskey consumers. Pricing is not the main barrier to consumer adoption, as has been evidenced by the very modest performance of bottled in India Jim Beam that retails at a very affordable price below locally bottled Scotch whiskey. So, duty reduction on Bourbon will not make any big impact on the premium whiskey market," said Brewers Association of India director general Vinod Giri, an industry veteran.

The industry is awaiting details of the deal, with govt officials assuring that interests of domestic players will not be adversely impacted. "CIABC believes that the bilateral trade deal will be equitable and mutually beneficial for both countries. CIABC is not against reduction in import duty, but wants it in a phased manner," said Confederation of Indian Alcoholic Beverages Companies DG Anant S Iyer.

When it comes to wine, the segment's share was less than 0.5% of the Indian alcohol market, and within that, Australian is the largest. "Success in the Indian wine market, especially imported wines, is driven not just by provenance, but by ability to distribute effectively," said Giri.