India's regular and mass spirits sector managed only 3.7% growth during the September quarter, lagging behind the 5.7% expansion recorded by prestige and premium categories. Companies point to weakened consumer sentiment driven by inflationary pressures, softer monsoons, and geopolitical tensions. Demand has softened notably in key markets like Uttar Pradesh, while policy hurdles in Maharashtra and Karnataka added further pressure on popular portfolios. Meanwhile, Allied Blenders and Distillers expanded overall volume by 11.1% to 10 million cases despite the broader segment slowdown.
Key points
Budget constraints among lower-income urban buyers are significantly depressing demand fo…: Budget constraints among lower-income urban buyers are significantly depressing demand for lower-priced alcohol portfolios.
Prestige and premium spirits continue to show stronger resilience than entry-level brands…: Prestige and premium spirits continue to show stronger resilience than entry-level brands despite moderating growth.
Unexplained demand slowdowns in regions like Uttar Pradesh and regulatory shifts in other…: Unexplained demand slowdowns in regions like Uttar Pradesh and regulatory shifts in other states compound industry challenges.
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Industry executives said the slowdown for the second consecutive quarter is difficult to explain in certain states.
"It is difficult to pinpoint the reasons for the slowdown, even in states such as Uttar Pradesh which had recorded strong growth earlier," said Amar Sinha, managing director of Allied Blenders and Distillers (ABD), maker of Officer's Choice whisky. There are "no clear factors explaining the weakness," he said. Prestige and above (premium) spirits grew 5.7% in the September quarter while regular and other (mass) spirits expanded 3.7%. The overall market growth was higher than the 3% recorded in the preceding quarter. India's alcohol market remains heavily skewed toward lower-priced products. The country has more than 1.4 billion people, but its drinking population is estimated at around 300 million, with nearly half consuming low-cost or unbranded liquor, industry executives said.
"With the prolonged and continuing West Asia crisis, softer monsoons and inflation, consumer sentiment is not very upbeat," said Praveen Someshwar, managing director of United Spirits, the country's largest liquor company. "Rural may not have fully…
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