Like most businesses the alcobev industry is also witnessing a challenging scenario. With the companies unable to operate and wholesale and retail trade coming to a standstill, most company wholesalers and dealers are sitting on high amount of unsold stock from the alcobev industry.
To make matters worse the lockdown came right in the middle of the financial year-end , which means that companies haven’t been able to complete their statutory requirements that ought to be met to keep the continuity of operations.
It is a known fact that the alcobev industry is one of the largest contributors to the economy. It approximately contributes Rs. 200,000 crores by way of various taxes and also sustains livelihood of nearly 40 lakh farmers employing nearly 20 lakh people directly and indirectly. The industry contributes anywhere between 20-40% to the States Revenue of tax receipts.
But the lockdown has not only brought the alcohol sales at a grinding halt, creating a financial impact on the companies. There are several other pending challenges that have added to the current scenario. The rise in price of ENA, its key raw material, denial of price increases by some states and delays in payment by some others. The concern for most of the players in the industry is that a prolonged shut down of industry will not only have a huge economic cost on companies, it may also force the farmers and workers into joblessness as a result of that.
Not to mention that the prolonged unavailability of legal alcohol has already witnessed growing sale of illicit liquor in just 2 weeks.
This story is from the June 2020 edition of Ambrosia.
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This story is from the June 2020 edition of Ambrosia.
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