The use of alcohol as drink is an age-old story in India and it appears that the technique for fermentation and distillation was available even in the Vedic times. It was then called "Somarasa" and was used not only for its invigorating effect but also in worship and medicinal uses. To date, not only has the consumption of alcohol been continued but it is an integral part of the Ayurvedic system of medicine.
The First distillery in the country was set up at Carwnpore (Kanpur) in 1805 by Carew & Co. Ltd., for manufacture of Rum for the army. The technique of fermentation, distillation and blending of alcoholic beverages was developed in our country on the lines of practices adopted overseas particularly in Europe.
The distillery industry today consists broadly of two parts, one potable liquor and the industrial alcohol including anhydrous ethanol for blending with petrol. The potable industry producing Indian Made Foreign Liquor and Country Liquor has a steady but limited demand with a growth rate of about 7-10 per cent per annum. The industrial alcohol industry on the other hand, is showing a declining trend because of high price of Molasses which is invariantly used as substrate for production of alcohol. The alcohol produced is now being utilized in the ratio of approximately 52 per cent for potable and the balance 48 percent for industrial and ethanol for blending with petrol, use. Over the years the potable liquor industry has shown remarkable results in the production of high quality spirits. Indian Liquor industry is today exporting a sizable quantity of Indian Liquor products to other countries.
The utilization of Ethyl alcohol or Ethanol, now popularly known as alcohol, for industrial use is a recent phenomenon and its importance came into being towards the end of the second world war. With protection being granted to the sugar Industry in 1932, a large number of sugar factories were established in the country, particularly in Maharashtra and Uttar Pradesh where irrigation facilities existed for cultivation of sugarcane. This increase resulted in accumulation of molasses, which resultantly, caused unmanageable environmental problems. At that time the demand for molasses was almost insignificant and the sugar mills had to incur some expenditure on removal of this bye product i.e. molasses. For resolving these problems a joint committee of U.P. and Bihar was constituted to explore the possibilities of developing alcohol based industries for the purpose of utilization of molasses. The Committee in its report recommended the establishment of distilleries for production of alcohol, utilizing molasses as substrate. They also recommended that alcohol produced by the distilleries should be admixed with petrol, to supplement motor fuel. The production of alcohol did not only help in solving the problems of disposal of molasses but it also filled up the gap in the demand and supply of motor spirit. As a substantial quantity of alcohol after meeting its requirement for manufacture of gasohol alcohol was diverted for production of alcohol based chemicals in different parts of the country. The utilization of alcohol for this purpose progressed steadily and a substantial quantity of alcohol produced in the country is now being utilized for manufacture of solvents and intermediates. Till a few years back a little more that 50% alcohol produced in the country was being utilized for production of alcohol based chemical but after the decontrol of molasses in the year 1993 the utilization of alcohol for production of chemical, dye-stuff ,synthetic rubber, polymers and plastics etc. has received a setback.
However, with the advent of ethanol blending with petrol/ motor fuel, the requirement of ethanol/ industrial alcohol has increased manifold in the country to the extent that in case 5-10 % blending, if made mandatory all over the country, the sugar factory molasses available in the country shall not prove to be adequate for meeting the total requirement of ethanol including its use for potable liquors and other industrial uses. The alcohol industry has a total installed capacity of 4200 million liters of alcohol in a year. However, the licensed capacity is concentrated in three states of U.P., Maharashtra and Tamilnadu. With the announcement of the Government of India to make blending of motor fuel with ethanol up to 5 % mandatory and to raise it to 10% by the year 2017-18, a substantial increase in the requirement as well as production capacity of ethanol is expected and a large number of ethanol distilleries are on the anvil of installation.
1Consumption:
Available evidence suggest that the number of alcohol drinkers is increasing. The lastest survey in 2001 found that the number of drinkers i.ncreased from 13.7 million in 1996 to 15.3 million in 2001 or increased 2.3 per cent per year
Among these 15.3 million drinkers, 13.0 million are males ( 55.9percent of the same age group) and 2.3 million are females (9.8 per cent). The highest prevalence is among people at 25-39 year of age ( 39.3percent), and young people at 15-24 ( 21.6 percent).
However, lakhanatermsirikulchai and poraneewattanasomboon(1998) conducted a study on behaviours and factors related to alcohol consumption among 1,141 students aged 15-24 in Bangkok from September to October (1998). The study revealed that of 624 male students, 334 ( 53.5 per cent) drank alcohol beverages and of 517 female students, 130 ( 25.1 per cent) did so.
Leading Companies for Alcohol in Thailand:
2Bangkok Liquor Co. Ltd.
Address: 3/1 Convent Khwang SilomKhet, Bangrok, Bangkok 10500
Phone: 026747901-2
Fax: 022126890
3Thai Alcohol Public Co. Ltd.:
Main Office: 43rd floor, Thai Alcohol Public Co. Ltd.
195, Sathon Tai Road, Yan Nawa, Sathon, Bangkok 101120 Thailand.
Thai Alcohol Public Co. Ltd. Is a part of the subsidiary companies of TCC Group, Thai Alcohol Public Co. was created in 1989 and is a manufacture and distributor of Ethanol 99.5% from agricultural products. The company echo friendly ny using rice husk as fuel in the production of steam in the fermentation process, distillation and generator set power and this help keeping the cost of alcohol production at a cheaper rate than other fuels. They then sell their products locally to oil companies to produce BIO Fuels.
4S.K. Liquor Co. Ltd.
149/5 Charoenmuang Road, Patumwan, Bangkok 10330, Thailand.
Phone: 02214-1479
Fax: 02215-5081
Contribution of Alcohol in GDP of Thailand:
The contribution of Alcohol in Thailand's GDP is 0.06%.
Labour Force Availability:
Others
(4799200)
Studies
(631800)
House Hold
Work
(4390596)
Unemployed
(28979226)
Employed
(3049450)
Seasonally Inactive Labor Force
(931800)
Current Labor Force
(32128000)
Not in Labor force
(15508096)
Total Labor Force
(32954704)
Person Age => 13
(522671049)
Age < 13
(147420039)
Population
(670,091,089)
Labour Force Survey in Thailand
Paper for
Joint OECD/ESCAP Workshop on Key Economic
Indicators
5Raw Material for that Alcohol Industry:
Chemical formula for Alcohol:
Chemical reaction of ethanol (alcohol):InChI=1/C2H6O/c1-2-3/h3H,2H2,1H3/i2-1
OH
The other words used for the same are like ethanol, ethyl alcohol, SD alcohol 40-B. While the chemical is in colorless flammable liquid form.
This alcohol can be used as a fast drying solvent in many products, especially in cosmetics and hair sprays. When the word alcohol is used alone, it refers to ethanol, the alcohol found in wine, beer, and distilled spirits.
6Raw materials Availability
Thailand is very strong in energy crop plantation. We have plenty of tapioca and sugarcane (molasses) which is more than the quantity used for ethanol production as per prescribed in the Substitute Energy Development Plan in 15 years. The assessment is as following:
Tapioca: Thailand has average production quantity during 2007-08 to 2010-11 year around 26.98 mollion tons, which is processed for domestic consumption at about 7.68 million tons. The remaining of 19.30 million tons can be used to produce ethanol at around 2,702 million liters per year or about 7.40 million liters per day.
Sugarcane: Thailand has average production quantity during 2007-08 to 2010-11 year around 68.67 million tons of which 25 million tons is used to produce sugar for domestic consumption. The remaining of 43.67 million tons of sugarcane can be used to produced ethanol at around 3,057 million liters per year or about 8.38 million liters per day.
http://www.thaitapiocastarch.org/images/article/24/04en.jpg
http://www.thaitapiocastarch.org/images/article/24/05-2en.jpg
7Suppliers Details:
Thai Ethoxylate Co. Ltd.
TEXThe Ethoxylate Co. Ltd.(TEX) for short, is a joint venture between PTT chemical Public Company Limited and Cogins Thailand Ltd., set up to produce and sell fatty alcohol ethoxylate, a substance made from ethylene oxodie (EO) and fatty alocohol, which is a key ingredients in the manufacture of various personal hygiene products. TEX is Thailand's first producer of fatty alcohol ethoxylate.
Wilmar International Ltd.
WilmarWilmar International Ltd. Founded in 1991, is Asia's leading agribusiness group. They are amongst the largest listed companies by market capitalization on the Singapore Exchange. Our business activities include oil palm cultivation, oilseeds crushing, edible oil refining, sugar, speciality fats, oleochemicals and biodiesel manufacturing and grains processing.
Thai Fatty Alcohol Company Ltd.
TFAThai Fatty Alcohol Co. Ltd. (TFA) the company manufactures and sells Oleochemical and Fatty Alcohol products, including Fatty Alcohol derivatives, all of which are used as a reactant for producing home and personal care.
TOC Glycol Co. Ltd.
TOCTOC Glycol o. Ltd. (TOCGC) is a producer of ethylene oxide (EO) and ethylene glycol (EG). The company's primary product, MEG, is an ethylene derivative and a key ingredient in the production of alcohol. TOCGC is the country's first producer of ethylene oxide and ethylene glycol.
Thai Ethanolamines Co. Ltd.
TEAThai Ethanolamines Co. Ltd. (TEA) for short, is a producer of ethanolamine, an essential ingredient in many personal hygiene products. Made from ethylene oxide (EO) and ammonia, (EOA) also has applications in industries ranging from paint, pharmaceuticals, and cosmetics to cement, detergent, fabric softener and alcohol. TEA is Thailand's first producer of ethanolamines.
Thai Oleochemicals Co. Ltd.
TOL Thai Oleochemicals Co. Ltd. (TOL) is a produce of Methyl ester. Fatty alcohol and Glycerin made from palm and palm kernel oil, these organic products are safe to humans and the environment.
8Political factors affecting Alcohol industry:
The Thai economy is expected to continue growing supported by the global economic recovery but political uncertainties remain a key risk factor and need to be closely monitored before a revision of the growth estimate will be made, according to the bank of Thailand (BoT). The central bank's Domestic senior director, Suchart Sakkankosone, said the Monetary Policy Committee, which is scheduled to revise. Thailand's economic growth projection on April 29, will take into account the mounting political conflicts in making its decision to adjust the growth estimates. He said that negative political factors had undermined confidence among Asian tourist more than European arrivals because the former are more sensitive to Thailand's political news. In the short term, the central bank will monitor political movements closely to see whether they will affect the economy and tourism. Mr.Suchart said the economy in January continued to expand, driven bu a surge in exports by 31.4% with a total value of US$13.63 billion and by improved consumption as evidenced by a rise in the consumer confidence index by 4.7% and the private investment index for the eighth consecutive month by 5.2%.
Economic factors affecting Alcohol industry:
The Economist confirms: "On-going concern over political stability will continue to prevent any major improvement in consumer and investor sentiment in the next year or so. However, towards the latter part of the forecast period, there will be a shift back to stronger domestic demand growth, but real GDP growth will still be slow."
Export growth is also set to decline in the wake of the economic slowdown in important export destinations such as the USA. Thailand inflation hit 9.2% last month, its fastest pace since 1998. The bank of Thailand raised interest rates for a second month in a row in order to fight inflation.
Cultural Factors affecting Alcohol industry:
Acceptance by Society:
Acceptance of dangerous drinking is encouraged through mass media, peer attitudes, role models, and the attitude of society in general ways that this acceptance is demonstrated include:
Movies, videos, music and television that glorify drinking and drunken behaviour.
Sports figures, movie stars, peers and local role models that appear to gain popularity, sex appel and fun from alcohol, with no ill-effects.
Lack of negative consequences, either formal (laws, enforcement) or informal (social disaaproval) for those who engage in dangerous drinking or create problems while drunk, sending the message that drinking is accepted as is intoxicated behaviour (including drunk driving assault, vandalism and public nuisance)
Public Policies and Enforcement:
Laws and regulations round alcohol affect the community as a whole, and can help change social norms, thereby affecting alcohol use. Examples of laws and regulations that have been shown to reduce underage alcohol use, binge drinking and the consequences of intoxicated behaviour include:
Requiring responsible alcohol beverage service training for bar owners and servers.
Eliminating drink specials or setting minimum prices for drinks.
Strengthening laws concerning hours of sale, density of retail outlets, and other factors affecting alcohol availability.
Funding stronger enforcement of existing laws.
Passing stricter laws concerning drunk driving and serving intoxicated drinkers
Instituting key registration and increasing penalties on those who sell to, buy for, or serve underage drinkers.
Reducing advertising and alcohol sponsorship of events.
Restricting alcohol use or sale in parks, publics, community events, stadiums.
Cultural factors affecting Alcohol Industry:
Alcohol beverages are an integral part of the fabric of adult society in most countries. Moderate and responsible drinking is considered to be part of normal and balanced life in most societies and patterns of drinking are largely culturally determined. The decision to drink by bith adults and young people is motivated by variety of factors- enjoyment, lifestyle, rites of passage, parental influence, and, not least cultural acceptability of drinking. In many countries, drinking is traditionally considered normative behaviour and an integral part of everyday life. The introduction of children to alcohol beverages often occurs early, within the family, and in a way that integrates drinking into other commonplace activities.
It is commonly, if wrongly, believed that in many cultures alcohol beverages have only been introduced fairly recently. There are , however, very few societies where alcohol beverages have not been enjoyed as part of local culture, as part of family and village life, or as a part of religious and spiritual life, since before written history (Heath 2000). Nevertheless, there has clearly been an increase in consumer choice in many countries in the past couple of centuries, with the introduction of branded products gives the false impression that these are the most frequently consumed alcohols, and this obscures the contuning popularity of non-commercial and traditional forms of alcohol.
The vast majority of the beverage alcohol consumed worldwide is not advertised. This is especially true in developing countries and in economies in transition, where many beverages are home-brewed or produced illicitly. In developing countries, commercially produced and advertised beverages types are generally inaccessible to the majority of the population, especially to young people. The price differential between commercially produced branded products and home-brewed beverages is often prohibitive. In addition, import tariffs and excise taxes can at times increase the price of a product to several times it's original value. The price of branded products also reflects higher costs of production. Such costs are clearly not associated with illicit and home-produced alcohol, thus making them overwhelmingly the beverages of choice. It should be noted, however, that many home-produced and illicit products, particularly in developing countries, use low-quality raw materials and may be contaminated, thus carrying health risks not associated with branded products. The majority of young people in developing countries when they do drink, consume alcohol which is not commercially marketed or advertised.
9Environmental and Legal factors affecting Alcohol industry:
The regulation of alcohol promotion, revised mainly in 2003, covers three aspects of advertising: (1) sites of pro-motion, which disallows billboard promotions in areas near educational institutions; (2) time of promotion, which bans broadcast advertisements between 5.00 a.m. and 10 p.m.; and (3) the content of promotions, which restricts any content concerning drinking persuasion and beverage properties, as well as requiring warning messages to be attached. Prior to the revision of the reg-ulations, spending on alcohol promotion in the broadcast media had grown sevenfold between 1989 and 2003 (Wibulpolprasert 2005).
The alcohol industry has found ways to circumvent the regulations by using indirect advertising in the controlled media and increasing promotions in unregulated, below-the-line media. A study in 2004 reports the high fre-quency of logos and names of alcohol beverages broadcast during prohibited times, as well as the promotion of logo and name-sharing products (Phipitkul & Sornphaisarn 2005). Another finding is that the budget for mobile advertisements, such as advertisements on vehicles and on-site promotions at venues, for example, increased from 2003 by 583% and 148%, respectively.
Government regulations t every level have affected the Indian liquor industry, introducing structural rigidities. Apart from high level of taxes and levies (that account for up to 65% of the consumer price), regulations pertaining to licensing, cration or expansion of brewing/distilling and bottling capacities, manufacturing processes (grain-based or molasses-based), distribution and advertising impinge on the industry. Further, liquor being a state subject, every state has different regulations (including those on distribution) and taxes fro the industry apart from restrictions as well as levies on the inter-state movement of liquor.
These regulations have impacted the industry on all fronts. The high level of taxes and levies and the fact that companies have little control over distribution systems mean limited pricing flexibility. Consequently, players have low margin levels. Then, as a result of the restrictions on capacity expansions and inter-state movement of liquor, larger palyers have either acquired or enterd into contarct manufacturing and bottling agreements with local players in various states. This means fragmented capacities with high overheads and poor economies of scale, which has further impacted margins. Restrictions on advertising have seen the industry resortsto surrogate advertising besides earmarking high budgets for promotional activites and point of purchase campaigns and offering discounts and commissions to retailers. Besides, in the past, when some states imposed prohibition, these markets virtually dried up overnight.
The government's excise policy is subject to a lot of sudden changes. The manufaturer's sometimes just need to get their L-1 licenses renewed and at times they need to apply afresh, like in the year 2001. In 1993, the L-1 license holders were allowed to set up 5 "dedicated" shops in Delhi in which they could sell their approved brands in addition to having them sold in the government retail shops. The policy was withdrawn in an ad-hoc manner in 1994. On being questioned about the effects of this policy, an official in one of the countr's leading breweries said thet the introduction of this policy had lead to an increase in their revenue by almost 30% which they have lsot out on since the policy got crushed, recently, the government's policy to open up 45 private liquor shops was quashed by the cabinet, because it meant that the MLA's power in the issue of a no-objection certificate for the setting up of a retail outlet would be questioned. Had this policy been implemented, the government would have earned Rs. 7.5 lakhs on each vend as license fees annually.
Import and Export restriction of Thailand Government for that Alcohol industry:
Government regulations at every level have affected the Indian liquor industry, introducing structural rigidities. Apart from the high level of taxes and levies (that account for up to 65% of the consumer price), regulations pertaining to licensing, creation or expansion of brewing/distilling and bottling capacities, manufacturing processes (grain-based or molasses-based), distribution and advertising impinge on the industry. Further, liquor being a state subject, every state has different regulations (including those on distribution) and tax rates for the industry apart from restrictions as well as levies on the inter-state movement of liquor.
These regulations have impacted the industry on all fronts. The high level of taxes and levies and the fact that companies have little control over distribution systems mean limited pricing flexibility. Consequently, players have low margin levels. Then, as a result of the restrictions on capacity expansions and inter-state movement of liquor, large players have either acquired or entered into contract manufacturing and bottling agreements with local players in various states. This means fragmented capacities with high overheads and poor economies of scale, which has further impacted margins. Restrictions on advertising have seen the industry resort to surrogate advertising besides earmarking high budgets for promotional activities and point of purchase campaigns and offering discounts and commissions to retailers. Besides, in the past, when some states imposed prohibition, these markets virtually dried up overnight.
The government's excise policy is subject to a lot of sudden changes. The manufacturer's sometimes just need to get their L-1 licenses renewed and at times they need to apply afresh, like in the year 2001. In 1993, the L-1 license holders were allowed to set up 5 'dedicated' shops in Delhi in which they could sell their approved brands in addition to having them sold in the government retail shops. The policy was withdrawn in an ad-hoc manner in 1994. On being questioned about the effects of this policy, an official in one of the country's leading breweries said that the introduction of this policy had led to an increase in their revenue by almost 30% which they have lost out on since the policy got crushed. Recently, the government's policy to open up 45 private liquor shops was quashed by the cabinet, because it meant that the MLA's power in the issue of a no-objection certificate for the setting up of a retail outlet would be questioned. Had this policy been implemented, the government would have earned Rs. 7.5 lakhs on each vend as license fees annually.
10Present Position and Trends of Business with Gujarat/India during last five years:
The Potable Alcohol Industry in India
The India potable alcohol market can be classified into „country-made liquor‟ and „Indian-Made Foreign Liquor‟ (IMFL) which account for the bulk of alcohol utilization in the country.27 The potable alcohol industry is estimated at a market value of approximately Rs. 300 billion and has been growing at the rate of 7-10 per cent per annum over the past few years. However, the exact shares of country liquor and IMFL manufacturing are unknown since production of the former category still thrives illegally in many areas, making it difficult to arrive at a correct estimate.
The potable alcohol produced in India is primarily made from sugarcane molasses and not from grain as in many other countries. Due to the increasing uncertainties involved in molasses availability (and the resultant increase in its prices) the industry is gradually accepting the option of grain-based alcohol.28 However, molasses still accounts for most domestically produced potable alcohol in the country. Apart from feedstock constraints, the growth of the industry is impeded by a high tax/duty structure; potable beverages are heavily taxed at various stages of production and distribution.
The process of manufacturing IMFL (such as whisky, rum, and brandy) includes a secondary distillation of the fermented mixture of grains and molasses that yields extra neutral alcohol (ENA) with 94.6 per cent alcohol content which is reduced in strength, blended with other products (including water) and flavored to obtain IMFL. The IMFLs are usually of 42.8 per cent v/v ethanol content. In the past few years, significant growth has been achieved in the production of quality spirits and the industry is now exporting these products. In terms of market players, the IMFL industry is highly consolidated with a few companies holding significant shares in the market. The production centers for IMFL are mostly located in the sugar-producing states of Maharashtra, UP, Karnataka, and Tamil Nadu and some in Haryana and Punjab. Regulation and taxation of the sector is under the jurisdiction of the state governments and is large source of revenue for the states.29
With the implementation of the ethanol-blending programmed of the government, ethanol availability to the potable alcohol industry is likely to get affected unless its supply is increased. Increased demand for ethanol has also resulted in the increased price of molasses in past few years.
Policy Recommendations and Conclusion
The study examines the domestic demand and supply situation of ethanol in context of „Ethanol Blending Programmed‟ in India. The ethanol blending programmed was launched in India in 2002. The blending of bio-ethanol at 5 per cent with petrol was made mandatory from October 2008 and was to be taken up by the oil marketing companies in 20 states and four union territories. The Indian approach to biofuels is based on non-food feedstock to deliberately avoid a possible conflict between food and fuel. However, the implementation of this policy has not had much success. This was mainly due to the shortage of ethanol. For successful implementation of EBP in India, a steady supply of sugarcane (or sugarcane juice) as feedstock at affordable price vis-à-vis petrol is required.
The estimated total sugarcane requirement in India by 2011-12 is more than the production of sugarcane in bumper years (approximately 355 and 340 million tones during 2006-07 and 2007-08 respectively). Achieving an increase in area under sugarcane cultivation is difficult because it is a highly water-intensive crop and largely irrigated crop in India. But improvements in the productivity and yield of sugarcane and in the recovery of sugar may bear fruit.
In May 2009, the Planning Commission of India advised the government to consider providing incentives to companies to acquire sugarcane plantations abroad, to bring ethanol into the country. Other options include collaboration with Brazil and other prospective international suppliers of ethanol in areas of R&D and cross border investment. These measures along with other steps to augment the domestic availability of ethanol, like the integration of the production and milling of sugarcane to the ethanol production stage can alleviate some bottlenecks.
A DBT-CII (2010) study on estimation of net energy and carbon balance of bio-ethanol across its value chain concludes a net positive energy balance resulting in overall reduction of carbon emissions; life-cycle studies in the field are still ongoing. The lower calorific value of EBP has implications for material, design and performance compatibilities of vehicular fleet. As the discussion on the tests of automobiles revealed, the regulated emissions of carbon dioxide, nitrogen oxide and hydrocarbons increased using ten percent blending with mileage accumulation on all test vehicle categories. Thus, while the blending up to five percent does not have any serious implications, the subsequent step up to ten and twenty percent will have to be done with caution.
In context of Thailand:
In 2011, the wine category was becoming more dynamic and there was a huge expansion in wine drinkers in Thailand. Many people wanted to upgrade their social status by drinking wine. There were a great number of wine drinking pubs, bars and restaurants established during 2010-2011. This made wine more accessible, since it was not available just via specific hotels and restaurants any more. Furthermore, the cheaper prices for New World wines made these products more accessible to existing wine lovers as well as new wine drinkers. While the on-trade and off-trade have relatively even shares of overall wine sales in Thailand, the stronger growth was seen in the on-trade channel thanks to a greater penetration of restaurants, pubs and bars targeting wine lovers, especially for the younger generation with modern lifestyles.
In Indian Context:
There are three main uses of ethanol in India. Of the total available ethanol, the maximum - about 45 per cent - is used to produce potable liquor, about 40 per cent is used in the alcohol-based chemical industry (as a solvent in synthesis of other organic chemicals) and the rest is used for blending with petrol and other purposes.10 The demand for ethanol has been continually increasing on account of the growth of user industries and use of ethanol as a fuel in the country. However, the production and availability of ethanol has largely lagged behind. India is the fourth largest producer of ethanol in the world after Brazil, the United States of America (USA) and China, producing approximately 2000 million litres of ethanol,11 mainly by fermentation of sugarcane molasses.12 Ethanol is made by fermentation of sugars: enzymes from yeast change simple sugars into ethanol and carbon dioxide. Potable ethanol and more than half of industrial ethanol is made by this process.However, the amount of ethanol currently produced in India is not sufficient to meet domestic demand. In the year 2008-09, there was a huge unmet demand from the industrial sector, which was met by imports.
Supply of ethanol
Ethanol is primarily produced using sugarcane molasses, a by-product of sugar manufacturing in India. Three factors primarily determine sugarcane production in India: area under sugarcane production, sugarcane yield per hectare, and the proportion of sugarcane output that is crushed by sugar factories. The area under sugarcane production in India has increased nearly 2.5 times since 1950-51 (Pohit et al., 2009) (reaching about 5.04 million hectares in 2007-08). However, it has tended to stagnate in the recent past (Table 4). There has also been considerable variation in the area undersugarcane production over time. Cultivation of this crop tends to follow a cyclical pattern of output (with three-four years of bumper harvests followed by relatively poor crops over a similar period subsequently). Farmers shift to other crops partly because of this, and also because other crops can be grown more profitably or within a shorter time span compared to sugarcane.
11Trade Norms and barriers of Indian Government for Alcohol Industry:
The alcoholic beverage industry is a multi-billion dollar business.
The top 5 emerging countries contributed $139171.1 million to the global alcoholic drinks industry in 2009, with a CAGR of 7.4% between 2005 and 2009. China leads the race with market revenues of $73,617.9 million in 2009. China is further expected to lead the alcoholic industry in the top 5 emerging nations with a value of $106,877.3 million in 2014.
However, the Indian liquor industry is estimated at Rs.34,500Crore or Rs345 Billion and has been growing at 12-15% per annum, reflecting a double-digit growth in the past financial year (FY 2009-10).
This report mainly focuses on the latest insights of the alcohol industry, where key players include United Spirits, Bacardi and Diageo maintaining their leadership in different alcohol products.
An attempt to segment alcohol products into IMLF, Country Liquor and Beer, have been made along with the top player in each product category. Furthermore, an analysis of marketing strategies used by top players, and the effects of government rules and regulations are examined.
Potential for import/export in Indian Market:
Potential for export in Indian market
The Indian liquor induatry comprises the IMFL, foreign liquor bottled in india (BII), foreign liquor bottled in origin (BIO), country liquor, beer and wine segments. The estimated 80 million case per annum IMFL segment primarily includes molasses - based whisky, rum, brandy, gin and vodka. This segment is dominated by whisky, which accounts for about 60% of its volumes, followed by rum at about 25%. The BII and BIO segments are very small in comparison. Put together, they are estimated to be less than one million cases per annum. The country liquor segment estimated to be one and half to two times the size of the IMFL segment is , however, characterizes by frangmented capacities with a number of small players focused on the high consumption rural areas. The beer market is estimated to be about 70-75 million cases per annum while the wine segment, estimated at less than three million cases a year, is, again, small. The Indian liquor market is concentrated in the southern part of the country, with this region accounting for about 60% of total IMFL sales and 45% of beer sales. Andhra Pradesh is largest consumer of both while Karnataka and maharastraare the second largest consumer of IMFL and beer respectively.
Alcohol based industry ( organic)
Sugarcane is the most efficient converter of solar energy. Blessed with sunshine and favourable geographical conditions, india is today the largest producer of sugar in the world .the sugar industry has provided molasses and alcohol and india have gainfully exploited these as renewable feedstocks to manufacture alcohol based organic chemicals. Since last three decades, the alcohol based industry is playing a significant role in the country's national economy.
The main divers for organic chemicals are P- Xylene, Napthalene, benzene, Buta-1,3 - Diene and isoprene and linear Alkylbenzene. This year india has exported mainly to USA china P.Rep, UAE, netherland and germany.
The main drivers for export Alcohol base chemicals are Monochloro Acetic Acid, their salts, Acentic Acid, beta picoline ( 3 - Methyl Pyridine), styrene and Disbutly phthalate. The main drivers . The main drivers for aromatic chemicals are benzyl alcohol, phenyl ethyl alcohol, diphenly oxide, musk ambrette and cinnamic aldehyde etc.
This year India has exported mainly to USA UK UAE Netherlands, Indonesia and Germany
Present share of alcohol in existing market:
12Business opportunity in existing market:
Registering a robust growth of about 30 per cent on yoy basis, alcohol consumption in india will cross 19000 million litres by 2015 from the current level of 6700 million litres, apex industry body ASSOCHAM said today.
India's alcoholic beverage market comprising beer, wine and spirits will reach over rs 1.4 lakh croremark in 2015 from current size of about Rs 50,700 crore, says an industry specific analysis.
India is one of the fastest growing alcohol markets in the world and largest consumer of whishkey which accounts for almost 80 per cent of the entire liquor market. Owing to India's crore is expected to cross Rs 54000 croremark within next two years.
But with the number of youngster and income levels on the rise, popularity of beer made from malt is increasing and is expected to reach 2.4 billion litres by 2012, said AAOHCHAM study.
Urbanization together with ever changing social norms, increased alcohol availability, high intensity marketing and relaxation of overseas trade rules have equally contributed to increased alcohol consumption.
Almost 45 per cent of 12th graders in metropolitan cities in india excessively consume alcohol and teenage drinking has risen by a whopping 100 percent during the course of last 10 years, revealed a recent survey conducted by AAOCHAM. India ranks as one of largest alchoholic beverage market across the globe considering that almost 70 percent of alcohol in south east asia is produced in india. Besides,india's contribution in total alcohol beverage imports in the region is nearly 10 percent.
FUTURE CHALLENGES
The integration of consumption and harm reduction strategies is critical in responding to alcohol-related harms. These harm reduction policies, targeting high-risk situations, will receive comparatively more support. Drinking-driving countermeasures, in particular, have shown initial success by reducing mortality and the death toll in recent years. However, strategies aimed at reducing consumption in the general population may be another issue.
After recovering from the 1997 economic crisis the Thai economy has continued to grow gradually, and if the association between wealth and consumption continues, as it has for the last four decades, increasing consumption is forecast. As the free market becomes the main eco-nomic force, competition among alcohol industries will create more influential marketing strategies. Despite the fact that the government has clearly announced alcohol consumption reduction as a target for the Healthy Thai-land Project by the year 2017, there is little light at the end of the tunnel in terms of effective policies as mecha-nisms to achieve this goal. Evidence-based effective health-orientated alcohol policies and effective enforce-ment are now urgently required.
Conclusion:
This industry has more opportunity for new entrant in the market because now government is also supporting this industry and now the growth rate is also increasing but the GDP contribution is very low. Competition is low so there is no cut throat competition in this industry and there is less chances of threat of competitors for this industry.
