United Spirits in talks with Haryana government to permit spirits in workplaces

United Spirits, India's biggest liquor firm, said it is in discussions with the Haryana government to allow spirits at workplaces after the state allowed low-content alcohol drinks such as beer, wine and ready-to-drink beverages inside large corporate offices from next month.
"Haryana has been relatively a more progressive state. They have started with beer and wine, and we are in discussions with them to see whether we can get spirits included," Hina Nagarajan, CEO of United Spirits, told analysts at an earnings call.

Last week, the state government under its 2023-24 excise policy allowed possession and consumption of low alcohol content beverages by the employees in offices having at least 5,000 employees and a minimum covered area of 100,000 sq ft in single premises.

The Confederation of Indian Alcoholic Beverage Companies (CIABC) said the significance of the decision is not about sales volume it could generate but in the paradigm shift in government's attitude towards alcohol. However, it is not making a request for inclusion of liquor yet.

"This decision is an acknowledgement of the role alcohol plays in de-stressing people after a tough day at work. It's a big decision by the government and we would rather have them progress at their own pace and build confidence," said Vinod Giri, director general at CIABC. "Once the model is established, addition of other categories will be an easier next step. Haryana towns like Gurugram are corporate trendsetters and we hope other such cities like Delhi, Noida, Bengaluru, Hyderabad and Mumbai follow suit."

The country's spirits market saw sales volume of 395 million cases during the year to March, a 12% increase over FY21-22, adding almost 40 million cases from its previous high about four years ago, industry executives said citing latest excise department data.

Liquor companies have to lobby governments hard for price increases and other regulations as they are controlled by state governments, which also run retail and wholesale business in several markets.

The maker of Johnnie Walker and Smirnoff said the Indian market is in a very volatile period due to constant route to market changes along with inflationary pressures. "The year gone by was volatile and route to market changes will happen but we have the muscle, when one state goes down to look at other avenues of growth and expand our shares across states," added Nagarajan.

The Diageo-controlled firm saw net sales expand 15.6% during the fourth quarter ended March after adjusting for slump sale and franchising mass brands a year ago. The prestige and above segment grew 23.2% while the rebased net sales for the popular segment fell 6.3% as inflation continued to impact this price-sensitive consumer segment.