Beer sales in Delhi down by 52%, but why?

Delhi saw a sharp 52% year-on-year drop in beer sales in May, which the state’s excise department is chalking up to exceedingly hot weather. But last month’s sales dip is part of an ongoing decline for beer in India’s capital territory — so what is driving down demand?

Beer sales in Delhi in May this year amounted to 8.3 million litres, a 52% drop compared to the 17.3 million litres sold in May 2022.

The Delhi government’s excise department has blamed exceedingly high temperatures for the decline, recording 16 days above 40°C during the month of May.

However, beer sales have experienced a significant decline throughout the first five months of this year, suggesting the summer heat is not solely to blame, according to Times of India.

Beer sales to the 31 May were down 43% year-on-year, at 31.1 million litres. Sales this year are also down on pre-pandemic levels, with Delhi recording 49.5 million litres of beer sold in the first five five months of 2019.

Times of India reported that its industry sources cited multiple reasons for the decline, including less variety and brand push, a lack of availability of chilled products in shops, less stock in stores and companies diverting products to states with higher margins.

Policy changes which came into force in the middle of 2022 have shrunk beer sales by almost half, the news outlet has said. One liquor company official even told the newspaper that consumers living closer to the border choose to buy beer in other states due to the low availability.

Delhi’s excise rules also force billing prices of beer companies to be the lowest in the country, meaning beer giants prioritise sales to higher-margin states, further reducing stocks within Delhi.

In other news, the hospitality industry in India is on the path to recovery following the Covid-19 pandemic, with investment key to ongoing growth, a new report has found. Read more on that here.