Inflation poses challenges for alcohol manufacturers | Pune News

PUNE: Liquor makers were facing multiple challenges due to growing inflationary pressure on direct raw materials, sources from the International Spirits and Wines Association of India said.
Soaring prices for extra neutral alcohol (ENA), glass and cartons used for mono cartons, in addition to the lack of price increases in most states, high taxes and levies were stretching them, according to members of the International Spirits and Wines Association of India (ISWAI). They said that suppliers’ declining share of consumer prices and states not allowing manufacturers to pass on the cost of high prices to consumers had put severe pressure on manufacturers’ margins, making it difficult to maintain their operations.
Nita Kapoor, CEO of ISWAI, told TOI: “Awards are given by states to manufacturers and unlike the FMCG sector, manufacturers in the alcobev industry are not able to share the burden of inflation with In many states, the manufacturer’s price – ex-distillery price (EDP) – on alcohol has been the same since 2017-18.This has compounded the problem where inflationary pressure is highest.
Kapoor said, “As states wish to maximize their excise revenues from the liquor industry, special consideration must also be given to manufacturers. It has therefore been difficult for manufacturers to maintain their operations. States should consider a balanced approach between supplier pricing, volume growth and taxation.
Suresh Menon, General Secretary of ISWAI, said: “The inflation rate based on the Wholesale Price Index (WPI) hit a record high of 15.1% last month, where (prices of ) almost all items/products increased.