Large liquor companies are strongly affected by Andhra's prohibition rules
BENGALURU: Liquor, beer and wine makers face difficulties in Andhra Pradesh, one of the largest liquor markets in India.
The government has been moving towards gradual prohibition. As part of that, he has taken control of liquor sales, which means that he collects what consumers spend and then remits it to the alcoholic beverage.
But government payments come with excessive delays. Companies are still paying around Rs 1,550 million for the period from September to December, several people aware of the matter said.
The companies claim that the movement towards prohibition has also led to the proliferation of unknown local brands at the expense of national ones.
These problems have hit (USL), the French giant Pernod Ricard and Allied Blenders&Distillers (ABD), as they are the three largest companies in terms of sales volume in the state and nationwide at around 65-70%. Its total outstanding amount is estimated at Rs 800 Rs. The three companies refused to comment on the matter.
The total amount due was close to Rs 1.800 crore at the end of last month, before the government cleared Rs 256 crore in January. “It is not hidden that fast-moving consumer goods depend largely on the working capital that is generated through capital turnover. In the current context of pending installments ranging from 21 to 100 days, this is unbalanced and uncertainty in payments has led suppliers to a deep financial crisis due to lack of capital, ”the suppliers of&Beer wrote in a letter to the government on last month.
An executive of a liquor company said the prohibition measures have led to the creation of at least 10-12 local brands. These are affecting popular brands like McDowell's whiskey and Officer's Choice.
Orders placed by Andhra Pradesh State Beverage Corp Ltd (APSBCL) have been ad hoc, the executive said. The government retailer could not be reached for comment.
Amrit Kiran Singh, executive president of International Spirits (ISWAI), said the problem began since the government took over the liquor retail trade. “We would like Andhra to follow a system based on the average participation in the national market of each brand during the last three years, so that no particular label is unfairly promoted. This system would ensure that the market shares of the brand would continue more or less in line with what existed before the government took over, ”he said.