In terms of absolute number of people who consume alcohol, West Bengal is second only to Uttar Pradesh, a joint study by conducted by economic research agency ICRIER and law consulting firm PLR Chambers has claimed.
Nearly, 1.4 crore people in West Bengal consume alcohol, due to which this sector is among the top three revenue earners of the state, the study claims.
Recently, the state’s liquor pricing model was tweaked from free market to the lowest ex-distillery price (EDP), which was followed up with an increase in taxes, which is a major concern for the industry, the report said.
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It has also been revealed that the steep hike in the market retail price of liquor has pulled the demand for India Made Foreign Liquor (IMFL) in West Bengal.
Even though the formula for calculating excise duty is based on lowest EDP, the levy has been hiked, an issue that needs to be looked into after taking into account how consumers react to price changes, according to the study.
The report also claims that India is one of the fastest growing markets for alcoholic beverages, with an estimated market size of USD 52.5 billion, as of 2020.
India’s liquor market is expected to grow at 6.8 per cent CAGR between 2020 and 2023. Also, between 2015-16 and 2018-19, the production of alcoholic beverages in the country increased by approximately 23.8 per cent, with the sector accounting for around 1.5 million jobs and generating about USD 48.8 billion in sales revenue during 2019, the study noted.
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Owing to all these opposing factors, India is unable to become a large exporter of alcoholic beverages like Chile, Argentina and China, it declared.
