The long lockdown had threatened to put liquor makers’ businesses on the rocks but more home deliveries could give their sober revenues a bit of a high.
The long lockdown had threatened to put liquor makers’ businesses on the rocks but more home deliveries could give their sober revenues a bit of a high. Both Swiggy and Zomato have kicked off home sales of liquor in Ranchi and the trend could catch on. “We will go live in Ranchi later today and 7 other cities in Jharkhand over the next couple of days,” Zomato said on Thursday. Swiggy said it’s hoping to roll out the service in other parts of the state within a week.
If permissions come through, consumers in other parts of the country, where liquor stores aren’t open, won’t miss their evening tipple. More state governments are expected to allow home deliveries since sales taxes from liquor account for a big chunk of their revenues. Potable alcohol and petroleum are still out of the purview of GST and for the majority of the states, excise duty on alcohol accounts for around 10-15 % of own tax revenues while auto fuels bring in about 15-20%.
Home deliveries sales, of course, are unlikely to be able to compensate for the loss of sales in bars, restaurants and social events. About 25% of revenues are generated at bars which are unlikely to open for a while. Javed Murad, founder at White Owl Brewery, told FE home deliveries would nonetheless help staunch the bleeding till the restaurants and bars are re-opened. Sachin Mehta, country director at William Grant & Sons, India told FE his firm is more than willing to align its supply chain and pivot to a consumer-led model.
Liquor companies have been badly hit by the lockdown having lost close to two months of sales now. While stores have been re-opened in some parts of the country, in others they were shut soon after being allowed to open because buyers failed to adhere to social distancing norms. A few states including Maharashtra, West Bengal and Chhattisgarh have already allowed home delivery of alcohol. Simba Craft Beer founder & CEO Prabhtej Singh Bhatia, said home deliveries in Chhattisgarh are generating reasonably good sales. India sells 340 million cases of spirit, 330 million cases of country liquor and beer each annually, according to ISWAI (International Spirits and Wines Association of India).