With UK Whisky, Gin Getting Cheaper, Desi Alcobev Cos Worried

Before we move to the nitty-gritty of the Indian liquor business, which is steeling itself for the sobering impact of lower imported alcoholic beverage (alcobev) prices and a squeeze on their sales, one has to applaud two Prime Ministers. Narendra Modi and Britain’s Keir Starmer have struck a delectable deal, one that boasts a Double Contribution Convention too.

For the moment, let’s get to a true example of ‘perspective’ — is the glass half full or half empty? For tipplers and those who love to flirt with the ABV (Alcohol By Volume) content in their elixir, the trade deal is a blessing. Not only will access to British brands of whiskies and gins get easier, but it will also be more affordable. Domestic brewers are in a different pub; their sales and revenue hangovers will begin before any revelry does.

How Much Will British Whiskies and Gin Cost Now?

Ground-level numbers. India is reducing import duties on UK whisky and gin from 150 per cent to 75 per cent, which will go down further to 40 per cent in the 10th year of the deal. While an entire nation waits impatiently for 2035, the immediate delight is that prices of prominent brands will go down by at least Rs 200-300 per 750 ml bottle to begin with.

For instance, a bottle of Johnny Walker Red Label whisky, which draws 150 per cent customs duties (Rs 262 per bottle) now, will cost Rs 131 less. Slightly up the food chain, its elder cousin, Black Label, with customs duties of Rs 495, will be cheaper by Rs 247.50 per bottle.

Those who feel such price cuts will not have a meaningful impact on sales should recall that in July 2023, domestic liquor firms were frantic in their meetings with the Commerce Ministry, seeking a prescribed MIP (minimum import price) of US$ 5 on all bottled Scotch whiskies. Their contention: Even a US$ 1-per-bottle cut in the MIP of imported whisky could wreak havoc with domestic liquor sales.

Incidentally, the CIF (Customs, Insurance and Freight) value of a Red Label bottle is Rs 175, while that of Black Label is Rs 330. At Indian liquor vends, the two are sold for Rs 1,700 and Rs 3,310, respectively, with the gnawing difference being made up of customs duties, excise, VAT, profit, retail margins and ‘VAT on retail margins’. With the trade deal now signed, prices will decline.

It may be recalled that India announced import duty reductions from 150 per cent to 50 per cent on US-made bourbon whiskey in February, in the run-up to PM Modi’s talks with President Donald Trump, before the US's April 2 announcement of trade tariffs. At India’s clubs and pubs, a crescendo has been building up since then, and it will only intensify now — Hic, Hic, Hooray!

The Size Of India's Alcobev Industry

India’s alcohol industry flagged a 40 per cent increase in whisky imports in the last fiscal (2024-25), leading up to the India-UK FTA negotiations. According to Market Research Future, India’s total alcobev market size was US$ 41.56 (Rs 3,61,572 crore) in 2025, which is expected to grow to US$ 68.75 billion (Rs 5,98,125 crore) by 2034, at a CAGR of 5.8 per cent.

Overall, it is the third-largest globally, dominated by country-made liquor (88 per cent) and Indian-made foreign liquor (IMFL, 9.5 per cent). Scotch whisky makes up 2.5 per cent of the whisky market. Despite its relatively small share, UK’s imports are worrying domestic firms because they hold the potential to change the very demographics of the market and consumption patterns.

“The popularity of international brands is growing,” ICRA Vice-President Kinjal Shah said. “Young Indian consumers are increasingly willing to pay more and experiment with different brands. The industry is benefiting from a moderation in input costs too, especially packing material such as bottles,” he added.

In the lead up to the signing of the trade pact, Scotch Whisky Association (SWA) had revealed that India has regained its position (from France) as the world’s top Scotch market by volume, with 192 million bottles exported in 2024, against 167 million bottles in 2023. These numbers will only grow.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) also pointed out that the sale of IMFL products in India was growing at 14 per cent annually. Analysts at Nuvama Institutional Equities proffered the anecdote that Indians now make up 39 per cent of the globe’s alcobev consumers.

Domestic, Global Firms Cross Swords

As expected, India’s FTA with the UK evoked mixed reactions from domestic and global players. Which is not surprising, since the former is being challenged by the latter.

CIABC director Anant Iyer was miffed: “We have been asking for a level-playing field for Indian players for long. We (now) only hope that the government has included MIP in the FTA to prevent dumping and under-invoicing, apart from removing non-tariff barriers and ensuring greater international market access for Indian alcobev companies.”

Last year, Chivas Brothers’ Chairman Jean Etienne Gourgues said: “The FTA will be a win-win for both India and the UK, providing choice for Indian consumers and encouraging Make in India IMFL brands. Better Scotch will be available to India at a more affordable price.” That promise is coming true.

Chivas Brothers, owned by the French major Pernod Ricard, owns single malt and blended Scotch whisky brands such as Chivas Regal, Ballantine's, Royal Salute and The Glenlivet.

Soliloquy: A day after the signing of the FTA with the UK, shares of Indian liquor firms opened lower and dropped further, over worries of market share loss. Som Distilleries’ share fell 3.3 per cent, Radico Khaitan slipped 3.44 per, Tilaknagar Industries dropped 1.15 per cent, Globus Spirits fell 1.11 per cent and PiccadilyAgro was down 2.74 per cent.

Their hangover has already begun.

(The writer is a veteran journalist and communications specialist. Views are personal)