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Demonetisation hits liquor sale in Maharashtra

The demonetisation of higher denomination currency notes not only cast its effect on the sale of costly spirits, but it also hit the poor man’s brew.

mumbai Updated: Dec 20, 2016 10:39 IST
Debasish Panigrahi
Beer faces maximum brunt as sales dipped by 11% compared to November last year.
Beer faces maximum brunt as sales dipped by 11% compared to November last year.(Pic for Representation)

Sale of liquor across the state has been hit following demonetisation, which was announced last month, with beer facing the maximum brunt as sales dipped by 11% compared to November last year.

While the sale of beer fell by 3.8 million bulk litre, Indian Made Foreign Liquor (IMFL) sales dropped to 1.62 crore bulk litres from 1.65 crore bulk litre in the corresponding month (November) last year, recording 1.46% fall.

The demonetisation of higher denomination currency notes not only cast its effect on the sale of costly spirits, but it also hit the poor man’s brew. With 2.65 crore bulk litre sale in November, the consumption of country liquor fell by 3 million litre against the consumption figures in the same month last year.

Avinash Malkani, owner of Popular Wines at Mahim, said business was severely hit in the first couple of weeks after the announcement on November 8. “Business was ruined in the first 10-15 days following the announcement. Sales fell by over 50%. Though things are better now, business is still down by almost 30% though Christmas is round the corner,” said Malkani.

The effect of the demonetisation on sales, said Malkani, varied according to area. “My shop is in a middle/ lower- middle class area, where people mostly use paper money. However, in places like Bandra and south Mumbai where people are used to shopping by credit/debit cards, business took a smaller hit,” he added.

While counter sale of alcohol witnessed a dip, situation in bars/permit rooms was no better. “Business is down by almost 15%,” said Sachin Shetty, owner of Shree Samarth bar and restaurant, one of the busiest joints at Mumbai central. Shetty said the sale would have dipped further if he had not installed card swipe machines in advance. “In my restaurant, most of the customers pay by cards. Still my business has been hit. Imagine places traditionally trading in cash. Business there would have been affected like never before,” he added.

Industry sources said the trend was a damper to the projection of consumption made following good monsoon this year. “Traditionally, liquor consumption reaches its peak across the country during December and January,” said Shobhan Roy, Director General, All India Breweries Association. However, he said, the unavailability of liquidity on account of demonetisation hit the industry badly, as has been the case with other businesses. “The effect was particularly devastating for Maharashtra, where high duty on alcohol had already affected sales before demonetisation. I am hopeful that situation will improve once enough cash is pumped into the market by February or March,” he added.

“We were expecting at least a 10% increase in sales this year (liquor industry traditionally witnesses 8 per cent annual growth). Sales figures were rising after July, till demonetisation was announced,” said spokesperson of a major brewery in Maharashtra with over 25% market share. “Our sales are down by almost 15 per cent,” he added.

Commissioner, state excise, V Radha admitted that revenues nosedived in November after registering constant increase since April this year. “In the two months preceding November, the increase in revenue was around 7% as compared to the figures last year. The November figures are in fractions,” she added.

While revenue in November last year stood at 1,024 crore, this year’s figure was Rs 1,027 crore. However, the figures in September (Rs 1,010 crore against Rs 943 crore last year) and October ( Rs 1,033 crore against Rs. 969 crore last year) were substantially higher.

Another senior excise official said the situation has worsened in December as retailers are unable to clear the November stocks till the third week of this month. “Bad days are ahead for the industry if situation does not revive in the next two months,” he said.

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