According to the Delhi government’s excise department, beer sales in Delhi experienced a significant decline of 52% in May this year compared to 2022. This drop in sales is attributed to the weather conditions, specifically the occurrence of temperatures exceeding 40 degrees Celsius on 16 days until May 31.
Industry sources have reported several factors contributing to the issue, such as a reduced variety and emphasis on specific brands, unavailability of chilled options in retail shops, limited stock in stores, and companies redirecting their product supply to states with higher profit margins.
In May of this year, beer sales in Delhi amounted to 8.3 million liters, a significant decrease compared to the 17.3 million liters sold during the same month last year. Furthermore, during the first five months of 2023, beer sales reached 31.1 million liters, reflecting a notable decline of approximately 43% compared to the corresponding period in the previous year.
Beer sales have seen a substantial drop of over 40% this year compared to 2022 and pre-Covid periods. In 2019, before the impact of the pandemic, the month witnessed sales of 12.6 million liters.
Delhi boasts a network of 574 retail shops along with approximately 900 hotels, restaurants, and clubs.
During the initial five months of 2023, the cumulative beer sales amounted to 31.1 million liters, representing a decline of nearly 43% compared to the 54.2 million liters sold during the corresponding period in 2022. In 2019, a total of 49.5 million liters had been sold in the same five-month period.
According to excise officials, beer currently accounts for over one-third of the total volume of liquor sales during the peak summer season. However, industry insiders argue that the potential for beer sales is much higher, given the prolonged duration of intense heat and high humidity levels in Delhi, which lasts for approximately six months of the year. Unfortunately, policy changes implemented midway through 2022 have resulted in a significant decline of nearly 50% in beer sales.
“Due to poor availability, those living close to border areas prefer going to Haryana and UP to buy the stock. So, the sales in neighbouring towns have been steadily increasing at 15-20% annually,” said a liquor company official.
AB InBev, a prominent player in the beer industry, highlighted the notable disparity in the availability of alcoholic beverages between Delhi and neighboring cities such as Gurgaon and Noida. According to an official, despite placing orders, liquor stores in Delhi occasionally fail to collect their stock, resulting in a lack of availability.
“We seek a level playing field across retail vends in Delhi, which is an important market. Availability of our premium brands across off-trade channels (shops) is totally divergent to our wide availability across on-trade channels in hotels, restaurants, bars and clubs in the city,” an AB InBev spokesperson said, adding, “We are working with the state corporations to make our brands available across shops in Delhi.”
As per a senior official from the excise department, although certain shops were favoring specific brands, the situation is showing signs of improvement over time.
“We are focusing on the quality of shops now. The size of shops, stock availability and the overall buying experience are improving,” said an official.
Vinod Giri, Director General, Confederation of Indian Alcoholic Beverage Companies, however, said Delhi witnesses a crisis for beer in the summer because of several factors, some outside the control of Delhi government and others rooted in the Delhi excise policy and rules.
“At 550-plus, the current outlet base is grossly inadequate to serve the city size of Delhi. Many shops are small and have less space — a big problem for stocking up a product like beer. Half the shops don’t even have chillers,” he said.
“Also, Delhi excise rules force the companies’ billing price to be the lowest in the country. When demand surges, well-known brands prioritise sales to higher-margin states,” he added.
