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Pricey Brands Sniff at Rs 180 Crore Market

Multinational liquor companies led by Diageo, which owns premium brands such as Johny Walker, Crown Royal, have approached the state government to open up Kerala market for imported spirits.

Published: 06th August 2014 08:17 AM  |   Last Updated: 06th August 2014 09:05 AM   |  A+A-

KOCHI: Multinational liquor companies led by Diageo, which owns premium brands such as Johny Walker, Crown Royal, have approached the state government to open up Kerala market for imported spirits.

Pricey.jpgCurrently, boozers in Kerala, which is one of the top alcohol consuming state in the country, is denied high-end imported brands such as Jack Daniels, Chivas Regal, Remy Martin, Glenlivet, making the field open for bootleggers who make a killing by selling spurious stuff.

Excise Minister K Babu told Express that there is a `100-crore grey market for imported spirits in Kerala. ‘’There is a proposal to allow FMFL through the Beverages Corporation, but no final decision on this has been taken,” he said.

According to Babu, the duty of 100 per cent plus sales tax would make imported spirits much costlier in the state. ‘’By bringing imported spirits through the official channel, we can eliminate the grey market,” he said.

‘’These products are aimed at the upper middle class consumers and the state stands to gain through increased revenues in the form of sales tax and excise duties,” said a top distributor. ‘’Bootleggers are making a killing in Kerala by selling low-quality stuff as ‘premium imported’ brands,” he said.

Star hotels in the state sell these imported brands using their import licence, but the prices are too steep. It is estimated that at least 1,000-1,400 litres of imported spirit brands are consumed in Kerala per day.

This is up from 400 litres per day as found by a survey conducted by a leading foreign liquor maker in Kerala 16 years back.

Considering that a litre of some of the premium brands costs `5,000 on an average,and the state consumes around 1,000 litres per day, the market for premium spirits could come up to `180 crore. 

Though the state has opened two outlets to sell premium brands _ one each in Kochi and Thiruvananthapuram _ they sell only Indian Made Foreign Liquor priced above a certain range. If allowed, Foreign Made Foreign Liquor (FMFL) could be made available through these select outlets.  At present, imported spirits are officially available from duty-free shops at international airports, in addition to star hotels which have their own import licence. The price for FMFL starts from `3,500 per bottle. Imported spirits are available in other states and cities such as Karnataka, Tamil Nadu, Mumbai, Delhi and in neighbouring Mahe.

Jose Dominic, managing director of CGH Earth, told Express that premium hotels like CGH Earth have liquor import license, helping them to serve the high-end tourist clients who demand imported spirits. According to him, the FMFL market is a small niche market catering to the upper-end of society. Also, high taxes in Kerala would make the product much more costly than other states.  He said the tourism sector in Kerala is impacted by the state’s inconsistent policy on beer and wine, which is in contrast to states like Maharashtra, where beer/wine  are available in hotels, which pay a meagre amount of `5,000 per annum for licence.

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