The Supreme Court of India recently banned sale of alcohol near and on the highways across the nation and this ban, according to India alcohol market analysts, could blow a huge hole in the earnings of major companies.
The India alcohol market has been on the uptick over the last couple of years owing to a number of factors including increase in number of adults, increase in tourism as well as increase in foreign nationals coming to India for work and leisure. However, things could change over the course of next few years due to a string of recent bans in a couple of states across the country as well as the Supreme Court ban.
Analysts have predicted an upsurge in India alcohol market over the course of next five years, but this increase might not be as high as predicted because the Supreme Court ban on sale of alcohol on highways wasn’t accounted for. If we are to believe multiple market research reports, the India alcohol market could suffer loses in tune of $10 billion over the course of next five years because of recent bans.
The Supreme Court banned sale of liquor near major highways to ensure that drivers do not drive under influence while making trips over the highway. The supreme court said in its statement that the move is geared towards bringing down the number of accidents on highways – a significant number of which are likely happening because of drunken driving.
Though there may be ways around this particular judgement, it is not likely that these loopholes and innovative ways could fill the dent in the demand that would be caused because of these bans.
Travel and tourism industry could also be affected because of alcohol bans on highways with some market research analysts predicted a whopping INR 1,000 crore loss to companies in this business. The most impact could be seen in states where tourism and oversees workers are at the highest including Maharashtra, Karnataka and Goa.
If we look at the northern region of India, Delhi and Gurugram could be among the hardest hit considering that the two cities are home to nearly 50 per cent of the Fortune 500 companies. In Gurugram, the impact will be palpable in Cyber Hub, a commercial complex that houses numerous companies, eateries, and bars.
Opponents of the ruling, who don’t have a stake in the alcohol industry, are of the view that the ruling will do little to cut down the rate of road accidents. While India has stringent fines on overtaking and speed-limits, lack of adequate law enforcement means rules are violated with impunity.