Indian summer

It all sounds so simple, but in India nothing is simple – politics always plays a part. On the surface, prime minister Narendra Modi’s business-first thinking could have been seen as a boon to the alcohol industry, but there is dogma there too. This is a man who implemented prohibition in Gujarat when he was the state’s chief minister. He has done little to arrest Kerala’s slide into partial-prohibition, which has also stemmed from political posturing (Prohibition is a big vote-buyer among some of the state’s pious electorate) and last year Bihar became the second largest state in India to impose a total ban, with the backing of Modi. Other states could follow, but Bihar’s ban hurt producers – unlike Kerala, which favours brandy, the people of Bihar drink whisky. This state’s performance has had a bearing on many whisky producers, including Officer’s Choice, which saw its total sales dip 5%. The brand is widespread enough to weather state vagaries, but Prohibition is never off the agenda, something that United Spirits is all too aware of. “We are disappointed whenever prohibition is announced because it doesn’t address the real issues or irresponsible behaviour,” says Kripalu. “The only way is to foster real behaviour change by promoting responsible behaviour through awareness and education. Sooner or later, governments realise that too, which is why prohibition has most often been rolled back in nearly every state that has implemented it.”

India is a country of 24 states and 24 alcohol policies. So it is important for producers to either bank on safe states (John Distilleries’ Bangalore Malt, for instance, grew 82% in 2016 but only sells in Karnataka) or spread their wares across as many states as possible to mitigate exposure to risk. New on the scene, White & Blue has done just that. The Alcobrew brand was launched in 2012 and has already reached a million cases, with 20 of 24 states on its distribution list. Alcobrew’s head of marketing, Rakesh Sheth, explains the strategy: “The brand was launched in the states of Delhi and Haryana and it expanded across various geographies and in CSD (canteen store departments). Indeed, it was a tough task to take on the established players of this segment. The single most important factor while launching White & Black was that it had to over-deliver on the blend. This is what hijacked consumers from competition.”

White & Black falls within the deluxe category, which in India is under £4 a bottle. That’s not even the least inexpensive whisky in India – they start at £2-£3 for 70cl (see Indian whisky segment ladder) and it was these lower rungs of the ladder that were impacted by the most recent political shockwave.


Modi’s demonetisation policy was aimed at purging the country of black market cash and ushering in a new formal economy of accountable cash and tax-paying transactions (it’s estimated only 1% of Indians are tax payers). 500 (£6) and 1,000 (£12) rupee bank notes were removed from circulation, with individuals allowed only small deposits of unaccountable savings per day in Indian banks. The larger picture was a temporary slump in India’s first quarter of 2017, GDP dropping from a forecast 8% to 6%. Cash shortages and reduced spending took many industries into the red and the whisky business suffered. Alcobrew’s Sheth explains: “It resulted in a severe cash crunch across the country as all the impulsive product categories took a hit. People were forced to prioritise their cash spends. In the alcohol business, the adverse impact of this exercise was much more severe in regular and lower segments as the target consumer is cash dependent. In higher segments a large consumer base uses e-money for transactions and so the relative impact was much less.”