25-10-2012, 02:13 PM
INTERNAL ASSIGNMENT ON ANALYSIS OF INDIAN ALCOHOL INDUSTRY
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Alcohol has a variety of uses; from industry to motor fuel and liquor making. There are about 100 distilleries in the country with annual installed capacity of 5.5 lakh kilolitres of power alcohol. Besides there are 70 sugar mills with distillery units producing power and industrial alcohol.
Uttar Pradesh has more than 50 per cent of total installed capacity of alcohol in the country. It has 20 sugar mills with alcohol distilleries. Among other important producers mention may be made of Maharashtra (10%), Andhra Pradesh (10%), Bihar (5 per cent), Karnataka, Punjab, and West Bengal.
India has a well developed liquor industry starting in the last part of the 19th century. It includes different brands of wine, whisky, brandy, rum, gin and beer. The total production of liquor was 40,159 kilolitres in 1994-95 which increased to 71,528 kilolitres in 1997-98 exhibiting an increase of 78 per cent during the 3 years.
This is due to the lifting of ban on the manufacture and sale of liquor in many states of the country. About 56 per cent of the total production of liquor is in the form of country liquor. Besides molasses, grapes, apple, cashew, mahua, coconut, date palm, rice and barley are other raw materials used in liquor making.
At present, there are 33 units manufacturing beer having an estimated annual output of 4.33 lakh kiloliters in 1997-98; the output in 1994-95 being 2.78 lakh kilolitres. Solan in Himachal Pradesh; Rampur, Nawabganj, Rose and Daurala in Uttar Pradesh; Kolhapur in Maharashtra; Bangalore in Karnataka; Chennai in Tamil Nadu; Bhadrakali and Kalyani in West Bengal; Udaipur in Rajasthan and Jagatjitnagar in Punjab are important centers producing liquor and beer in the country
India imports some good quality liquor from foreign countries mainly from Europe and America. It also exports Indian made liquor to neighbouring countries of Asia and Africa. During 1995-96 India imported Rs. 40.93 crore worth of beverages, spirits and vinegar against the total export of Rs. 45.85 crores.
SWOT ANALYSIS
STRENGTH
Renewal and investment
Innovation and Technological development
Experience in searching for new markets, niches and partners
Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage.
WEAKNESS
Old technologies and poor work organization
Insufficient pace of creation and implementation of innovations
Insufficiently effective activities of small and medium-sized businesses
Change in household consumption patterns
OPPORTUNITIES
Presence of a favorable market
Market globalization
Foreign direct investment promoting knowledge and developing export channels
Transfer of production to the countries with smaller labour costs
Well established distribution network
THREATS
Unfavorable market trends in energy resources
Increasing competition among exporters and decreasing dependency on one market
Intense competition between the organized and unorganized segments and low operational cost.
Water scarcity in India
Implementation of Goods and Service tax by 2011
PEST Analysis
Political
The Alcohol industry in the India continues to face political challenges as it tries to extricate itself from arcane laws left over from the prohibition era. Although some states have abolished laws prohibiting the
sale of beer, wine and spirits on Sundays and have opened the door to Internet sales of wine, many other states are not as progressive.
The hot political debate in 2010 revolved around the privatization of alcoholic beverage sales. Every state has a department that sets and enforces the regulations concerning the sale of wine, beer and spirits. Nineteen states, called "control states," also manage the sale of alcoholic beverages by acting as either the retailer, distributor or both. The wine industry has taken notice of this push and advocates the concept in general, as some of the control states do not allow the sale of wine in their state-owned liquor stores which may impact overall sales trends in those states.
Economic
The economic recession that started in late 2007 had a profound impact on the wine industry as consumers turned to the more affordable value-priced wines. In Maharashtra, a robust grape harvest in 2009 added insult to injury as wineries discounted their prices even more to keep their inventories down. Although in India , wine consumption grew by 1.9 percent in 2009, total sales dropped by 3.3 percent -- the first decline experienced by the wine industry. Forecasters expect luxury spending fueled by economic growth to bring high-priced wines back to the forefront.
Social
In their 2010-2011 State of the Alcohol Industry report, SVB Financial reported that UB Group continue to drive the Beverage segment, and they expect that trend to continue until at least 2020. The Millennials' consumption matched that of the Boomers in 2009, but they spent significantly less per bottle. If all trends continue, the Millennials will become the new drivers of the industry as they expand their palates and increase their income.
Technological
Mobile bottling expanded to the Midwest in 2011 in a move expected to foster growth in the area's small boutique wineries. For the larger Alcohol producers, the big news involves advances in computer hardware and software. The 2010 Alcohol Industry Technology Symposium's featured topics included mobile marketing, customer relationship management or CRM systems, how to fight cybercrime and a host of other low-cost technologies.