Supply chain issues triggering liquor shortages in Delhi

The national capital is experiencing an alcohol shortage across categories, due to supply chain issues, especially for imported brands, shortage of beer as companies did not ramp up capacity during two covid years, fewer operational liquor stores, and delays in revised excise policy.

A significant backlog in receipts of imported gins, single malts, and vodkas is being experienced, said the senior business manager of one of India’s largest alcohol distributors highlighting that the shortage of imported alcohol is also due to the Russian invasion of Ukraine, as Ukraine is the largest producer of glass bottles. This has disrupted the entire supply for alcohol producers in Europe.

Shortage in categories like beer is due to the early consumption of stock on the back of excessive heat and the lack of planning by brands who were unable to produce additional stock in advance in February and March. Usually, 40% of India’s annual beer sales happen in April-June.

“Companies keep building the stock till March but this time, many businesses did not have the time to build the stocks. Additionally, Delhi doesn’t have its breweries and several neighboring state governments directed breweries to cater to their domestic markets first,”

Vinod Giri, director general of the Confederation of Indian Alcoholic Beverage Companies (CIABC).

Prem Dewan, managing director of DeVANS Modern Breweries which makes Godfather and Six Fields beers said Uttar Pradesh recently banned the export of liquor, which may have affected the liquor availability in Delhi. Many states have similarly also banned the export of beer, which has led to an acute shortage in Delhi.

Giri said Delhi is one of the top 7-8 markets for most alcohol manufacturing and distribution companies in India. Qualitatively, it takes up a much larger pie, with imported products accounting for about 30% of all-India volume, making it a ‘showcase market’ for most brands.

The delay in updating Delhi’s excise policy, which was supposed to be out in April has also caused a backlog in new labeling of bottles, says, Rahul Singh, founder of The Beer Cafe, informing that now the excise policy is expected to be updated by either July or August.

Under the excise policy, the government was to exit the business, and auction vends to private entities. Delhi had about 850 stores, but now around 460 vends have become operational. Of these, many have now decided against renewing their licenses, claiming the business was unviable.

The store’s decision to not renew licenses is also a root cause of the shortage, Giri says.

Some retail shop owners were unable to sustain their business because the market resorted to deep discounting. Before the new excise policy was introduced last year, liquor in Delhi was sold at maximum retail price.

The lack of knowledge on the availability of discounts is also causing people to stock up. This shortage has also disrupted larger events like weddings in the capital because the alcohol of choice is not available, the person added.

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