INDIA – Som Distilleries & Breweries Ltd., one of the leading alcoholic beverage manufacturers in India, has received the greenlight to expand its beer capacity at its Hassan plant, Karnataka.
The liquor company, which is a leading manufacturer of beer, whisky, vodka, rum, gin, ready-to-drink beverages, and country liquor, says the expansion will allow the company to meet the growing demand for its products and strengthen its position in Karnataka beer market.
In a regulatory filing, Som Distilleries and Breweries said, “We have received the relevant permissions from the Excise Department towards the proposed expansion of the beer capacity at our Hassan plant.”
Som Distilleries had stated that the orders had been placed by suppliers based out of Germany and India.
With over five beer brands in its portfolio, SDBL has the largest Indian single-location brewery plant with distillation, storage, and maturation facilities.
The request approval will enable the Karnataka producer to increase capacity by around 60 million cases every year in the Karnataka plant.
The expansion is timely as data from Statista show that the US$11.6bn beer market is expected to grow annually by 5.94 percent (CAGR 2023-2028).
Beer volume is expected to amount to 4.8bn L by 2028, with the market for beer expected to show a volume growth of 0.1 percent in 2024.
The company last month announced the launch of a new strong beer, Legend, in the state of Karnataka.
“This high-alcohol beer is a strategic move to attract strong beer enthusiasts and consolidate the company’s market share in the state. With this expansion and the introduction of “Legend”, Som Distilleries is well-positioned for continued growth in the Karnataka market,” the company said.
High taxation crippling Indian spirits industry
Meanwhile, the Indian spirits industry experienced a slowdown in demand to 2.2 percent in the quarter ended September, reversing a 7-15 percent growth trend over the past two years.
Lower sales of mass-priced products, increased taxation, and high base were some of the factors highlighted impacting the growth of the industry.
On the other hand, whisky remained the largest segment accounting for two-thirds of overall spirits demand, growing 3.2 percent on a high base between July and September.
Dilip Banthiya, Chief financial officer at Radico Khaitan said, “In general, the regular category or the popular category is having muted growth as far as the industry is concerned. Certain states like Karnataka, increased duty by 20 percent. There is an impact on demand at that price point. In UP, there is some down trending.”
Companies, however, expect faster growth in the second half of the calendar that typically accounts for a larger share of liquor sales due to festivals and weddings.