AP set to oust Maharashtra from top slot in beer consumption

Sambit Datta

Mumbai, Nov 27: Spurred by a rally in strong beer consumption, Andhra Pradesh is all set to oust Maharashtra as the biggest beer consuming state in the country in the fiscal 2001-02.

Andhra Pradesh, along with Uttar Pradesh, is now touted as the fastest growing beer market in the country.

Industry experts predict that in this fiscal beer sales in Maharashtra may come down to around 120 lakh cases from 131 lakh cases sold in 1999-2000.

All industry indices point to continuous stagnation in the Mahar-ashtra beer market. On the other hand, the neighbouring southern states of Andhra Pradesh, Karnataka and Tamil Nadu have grown successfully in volumes. Industry analysts blame the declining growth of beer in Maharashtra mainly due to discriminatory high duties based on the strength of alcohol in beer.

According to industry sources, the Maharashtra state government may contemplate a further hike in duties on strong beer in anticipation to jack up the revenues.

However, the move could be counter-productive, say industry analysts, as strong beer, accounting for more than 60 per cent of the total beer consumption in the state, has emerged the mainstay of the local units.

According to the analyst, bringing down the duty on a mild beverage like beer and increasing the volumes is the only way to increase the revenues. It is feared that the law of diminishing returns will apply if the prices are increased further as a result of increase in excise duties.