As consumers, we in India make our mark in strange areas. Figures recently released by the Scotch Whisky Association (SWA) for the consumption and export of their heady genre of alcohol, show India is now the world’s largest Scotch whisky consumer by volume. Notching a 60% hike in 2022 imports over the previous year, India has just overtaken France to become the largest market for the Scottish brew having guzzled 219 million cl (700ml) bottles compared to France’s 205 million last year.
According to the rules, Scotch whiskey is an alcoholic beverage produced from malted barley in the 140 distilleries in Scotland; and the Scots are very clear about holding on to their pedigree: only whisky produced and bottled in Scotland can be called Scotch whisky.
While the single-malt brands like Glemorangie, Glenlivet, Isle of Jura and Laphroaig are finding increasing takers, it is the blended, bottled scotch brands such as Johnnie Walker and Chivas Regal that are the most popular both in India and elsewhere and account for 59% of global exports.
Yet Scotch is only a very small 2% slice of India’s massive 2 billion cases-a-year whisky market. The problem is high tariffs of 150% imposed by India, lament the Scot exporters. If the UK-India Free Trade Agreement (FTA) goes through and tariffs are eased, it could generate an additional billion pounds (about Rs 10,000 crore) for Scotland’s distilleries.
The Whisky club
The Scots have rightly fixed their sights on India, as it is definitely whisky country. Spirits – particularly whisky and rum – are historically preferred and have strong associations. They are considered ‘macho’ and are part of the ‘fellowship culture’ of the army and other defence services. Rum is the traditional, hardy stuff popular among the army ranks, while the British, among their many colonial footprints, left whisky behind as an aspirational drink of the elite.
The ‘officers mess’ was the club culture of yore where the Brits along with their ‘brown’ officers unwound and relaxed in the evenings. The whisky ‘chota’ still livens up ‘officers messes’ in cantonments around the country, even as it has migrated to the pub culture of new, urban India. Public drinking is still largely taboo but changing family mores and increasing disposable incomes have now spurred alcohol consumption to double-digit growth.
This growth is all in the whisky segment. Wine is becoming popular among the urban elite but still accounts for just 3 million consumers and 24 million litres a year. This works out to a per capita consumption of just one bottle a year, compared to 50 bottles for Italy and the US. Maharashtra has tried to promote grapes in the Nashik and Sangli regions, and even given wineries concessions as ‘small scale’ industries. But these efforts have failed.
Former Maharashtra’s home minister R.R. Patil, who tried to promote grape orchards in Sangli, once told this writer the rustic Maratha had no use for wine as it was too smooth and failed to give ‘a kick’!
There is little doubt that India is a ‘high spirits’ market. It is the third largest in the world after Russia and China, and consumes 5 billion litres of alcohol every year. Yet the base is still narrow as only one in 7 persons consumes liquor; and total consumption – considering only drinkers – is just 4.6 litres a year, lower than the world average of 15.1 litres.
Double-speak policy
Significantly, there has always been government double-speak towards alcohol consumption. Mahatma Gandhi led the temperance movement against alcohol and demanded total prohibition in the country. Some states including Gujarat and Bihar have imposed prohibition, while some like Tamil Nadu introduced it only to withdraw prohibition later.
On the other hand, state governments have been raking in huge excise revenue from alcohol sales. This account as much as 10-15% of the states’ own-tax revenue. UP last year generated 21% of its state revenues from liquor sales amounting to around Rs 31,500 crore, while Karnataka came second with Rs 21,950 crore. The 29 states and union territories perhaps cumulatively raise close to Rs 2 lakh crore from liquor sales.
The greed to make money from liquor has driven up the excise rates across the country with serious fall-outs. A high tax does not create greater temperance. It drives the poor to spurious liquor with dangerous consequences. The International Spirits and Wine Association of India estimates that around 40% of the five billion litres of alcohol consumed every year in the country is illegally produced. According to the National Crime Records Bureau (NCRB), 6,172 people died between 2016 and 2020 from consuming spurious liquor.
Low taxes and a wider net is always more paying in the long run. We should also learn from the failure of prohibition in Gujarat and Bihar and end moral policing. As consumers,people should be left to decide when and how much they tipple, as long as it is without bounds of decency.