The Hindu Business Line : Lack of freezers puts TN beer industry growth in the cold

Brewers are bracing for a nearly 40 per cent sales drop in the month of May in the State, the country's third largest guzzler, where Tamil Nadu State Marketing Corporation (Tasmac) took over retailing from private hands in December last year.

They blame inadequate chilling facilities at the trade level for the market plunging. Informed sources said the beer consumption in the State might fall to 7.5 lakh cases from roughly 12.5 lakh cases in the same month last year. "As of today, the sales for the month, is over five lakh cases and we see it ending at about 7.5 lakh cases at the best.

This is a significant fall in a peak summer month which has been traditionally good for the industry," sources said. Beer, which is struggling to shrug off the seasonal hangover, generates substantial volume in the months of April and May.

The still-not-developed retail infrastructure for beer, coupled with active summer showers, may provide a setback in a crucial State like Tamil Nadu, which could upset the industry's hopes for robust summer sales.

"We believe non-availability of chilled beer is a big issue as mercury climbs up in summer. This is true in the case of Tamil Nadu where consumers are not used to taking warm beer home and chilling it before consumption. Many State-run shops are not yet provided with freezers. There are attempts being made to correct the situation through leasing arrangement for freezers in some outlets, but it requires an organised effort when they (State) are running about 8,000 liquor vends," the industry sources added.

It may be mentioned that the State decided to take up retail trade of Indian-Made Foreign Liquor (IMFL) and beer to beat back cartels and plug leakage in excise revenues.

In fact, major brewers like United Breweries (UB) and SABMiller, which manage Shaw Wallace Breweries, had sounded apprehensive about retail infrastructure for beer as Tasmac took charge of retail shops last year.

This comes even as the industry is working towards improving the presence of beer at retail points across the country, which remains abysmally low between 5 and 10 per cent.

The brewers argue that the share of retail space for beer in many markets in the country is not on par with the product's 15 per cent average share in the excise revenues of most States.

More Stories on : Trends | Breweries | Storage | Tamil Nadu

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