E-Malt.com News article: India: Beer sales rise sharply in April-June quarter

Beer sales in India rose sharply in the April-June quarter as state tax changes made spirits more expensive in several major markets and pushed some drinkers toward lower-priced or more stable beer options, Vinetur reported on September 7.

National beer volumes increased more than 17% from a year earlier in the first quarter of fiscal 2027, according to industry officials citing excise data and statements from the Brewers Association of India. That marked a clear acceleration from roughly 4% growth recorded for the full fiscal year 2025. The jump amounts to an improvement of about 13 percentage points, although the periods are not directly comparable because the latest figure covers the peak summer quarter for beer rather than a full year.

The shift was most visible in Maharashtra and Karnataka, two of India’s largest alcohol markets. Vinod Giri, director general of the Brewers Association of India, said beer sales in the quarter rose 42% in Maharashtra and 35% in Karnataka from a year earlier. He said the increase was driven mainly by favorable state excise policies that encouraged consumption of milder alcoholic beverages.

At the same time, the spirits market slowed. Volumes of spirits, excluding fermented alcoholic drinks, rose only 2% in the June quarter, according to officials cited in industry reporting. Whisky, which accounts for nearly two-thirds of the spirits market, declined 1% as demand weakened for lower-priced brands. Growth in brandy and vodka was not enough to offset the decline in whisky.

The change reflects how state tax policy can quickly reshape consumer demand in India’s fragmented alcohol market. Maharashtra, Karnataka, Odisha and West Bengal have raised taxes on Indian-made foreign liquor, or IMFL, while keeping beer prices unchanged or, in some cases, reducing them. That widened the price gap between beer and spirits and made beer more attractive to consumers, especially in price-sensitive segments.

Executives at large alcohol companies said the impact has been strongest where tax changes directly altered shelf prices. Kartikeya Sharma, president of AB InBev India, said Maharashtra began the recent surge in beer demand after the state increased taxes on spirits. He said the market had already posted growth of about 40%-45% last year and was still expanding at about 40% this year. He also said Karnataka had since joined the trend, with beer sales in that state growing more than 50% over the previous three months.

Brewers said the first quarter also benefited from seasonal demand. April through June is typically the strongest period of the year for beer in India because of summer heat, and industry representatives said the category also got support from below-normal monsoon rains and unusually dry conditions in some areas. Those weather factors likely helped lift consumption beyond the effect of tax policy alone.

That seasonal backdrop is important to the latest numbers. The more than 17% national increase compares the strongest period for beer with the same quarter a year earlier, while the earlier 4% figure refers to a full fiscal year. Industry data cited publicly do not include absolute sales volumes, so the scale of the increase in liters was not disclosed.

Still, the divergence between beer and spirits appears large enough to show a real shift in purchasing behavior. For fiscal 2025, both categories grew by about 4%, suggesting a relatively similar pace at that time. The latest quarter shows a much wider gap, with beer pulling ahead while spirits nearly stalled.

Spirits makers said demand has remained soft for broader reasons as well. Amar Sinha, managing director of Allied Blenders, said overall demand has been subdued and that Maharashtra’s IMFL market did not grow. He also said lower-priced spirits in Karnataka were hurt by the price difference with beer. In northern India, he said the Shravan religious period weighed on alcohol consumption in August and further moderated demand, though he added that the market could start improving from September as temporary pressures ease.

The weakness in spirits is especially important in India because the alcohol market remains heavily weighted toward lower-priced products. The country has a population of more than 1.4 billion, but the drinking population is estimated at about 300 million, with a large share consuming low-cost or unbranded liquor. That makes relative pricing especially powerful. When taxes lift the price of mass-market spirits and beer remains stable, even modest changes can influence what consumers buy.

Neeraj Kumar, India managing director at Suntory, said the effect varies by state and by price tier, with excise policy changes creating short-term gaps in some segments. His comments reflect a long-standing feature of the Indian alcohol business: each state sets its own rules on taxation, pricing and distribution, so national trends are often the result of several local policy shifts happening at once.

Beer’s recent momentum has not removed pressure on brewers’ profits. Companies still face cost and pricing constraints, even as volumes improve. But the current quarter has given the industry one of its strongest growth readings in years and has reinforced the argument, often made by brewers, that lower-alcohol beverages can gain share quickly when tax structures favor them.

The strongest gains have not been uniform across the country. Sharma said Telangana showed healthy improvement after a steep decline last year, while West Bengal, Haryana and Uttar Pradesh were more subdued. That uneven performance again points to the importance of local regulation, price levels and regional demand patterns.

What the quarter appears to show most clearly is a direct consumer response to relative taxation. In markets where spirits became more expensive and beer did not, beer sales rose sharply. In a country where alcohol demand is highly price sensitive and state policy can shift market dynamics quickly, the latest quarter suggests that tax decisions are now playing a larger role in deciding which category grows and which one loses momentum.


08 September, 2026