India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

some are altered to fit <strong>India</strong>n taste preferences, such as adding carbonation. 115 A survey <strong>of</strong>
the <strong>India</strong>n juice market found that fruit drinks (consisting <strong>of</strong> a maximum 30 percent juice)
had the largest market share (83 percent) by value in 2003. 116
Although <strong>India</strong>ns drink a wide variety <strong>of</strong> nonalcoholic beverages besides tea <strong>and</strong> c<strong>of</strong>fee,
most <strong>of</strong> these drinks are not necessarily cold. A survey found that <strong>India</strong>n cold drink
consumption is low. Specifically, approximately 22 percent <strong>of</strong> the rural population <strong>and</strong>
23 percent <strong>of</strong> the urban population consume cold drinks, <strong>and</strong> only 4 percent <strong>of</strong> the
population consumes cold drinks every day. 117 This low consumption <strong>of</strong> cold drinks is
likely because <strong>of</strong> limited refrigeration in <strong>India</strong>n households.
<strong>India</strong>ns consume spirits, beer, <strong>and</strong> wine, but in general, <strong>India</strong> has a low level <strong>of</strong> alcohol
consumption compared with other countries. Alcohol consumption in <strong>India</strong> was
1.8 billion liters in 2008, compared to 26.3 billion liters in China. 118 A 2008 study <strong>of</strong> the
<strong>India</strong>n drinks market estimated that spirits held a 75 percent share <strong>of</strong> the market by
value. 119 Beer <strong>and</strong> similar drinks had a 24 percent market share, <strong>and</strong> wine held the
remaining sliver <strong>of</strong> the market. Out <strong>of</strong> the dominant spirits category, whiskey is most
popular. In 2007 the top three spirits by value held the following market shares; whiskey,
71 percent; br<strong>and</strong>y, 10 percent; <strong>and</strong> vodka, 2 percent. 120 Despite overall low alcoholic
consumption rates, whiskey is very popular, <strong>and</strong> <strong>India</strong> has the highest total whiskey
consumption in the world. 121 <strong>India</strong>n youth reportedly prefer white spirits, such as vodka,
sales <strong>of</strong> which are increasing. 122 With regard to beer, <strong>India</strong>ns on average drink only about
0.75 liters per annum, which is much lower than the 99 liters <strong>and</strong> 116 liters per capita
consumption in the United Kingdom <strong>and</strong> Germany, respectively. 123 The beer market is
growing, however, at an estimated 12 percent a year. 124
Wine consumption is concentrated in certain cities <strong>and</strong> states. Mumbai <strong>and</strong> New Delhi
are the largest wine markets, followed by Bangalore <strong>and</strong> the state <strong>of</strong> Goa. 125 Generally,
<strong>India</strong>ns prefer red <strong>and</strong> white table wines, which comm<strong>and</strong>ed an estimated 80 percent <strong>of</strong>
the <strong>India</strong>n wine market in 2008. 126 There is a limited market for sparkling wines <strong>and</strong>
champagne, which accounted for about 16 percent <strong>of</strong> the wine market in 2008. The upper
class, which drives <strong>India</strong>n wine consumption, prefers traditional wine presentation that
includes “real corks, full size bottles, <strong>and</strong> dry red <strong>and</strong> white wines.” 127 The middle class,
on the other h<strong>and</strong>, prefers sweet wines with a more nontraditional presentation that
includes screw caps <strong>and</strong> smaller bottles.
115 Industry <strong>of</strong>ficial, interview by Commission staff, Mumbai, <strong>India</strong>, May 11, 2009.
116 DATAMONITOR, “Juices in <strong>India</strong>,” May 2004, 9, 6. The 2003 data are the most recently available
information.
117 Yadav <strong>and</strong> Kumar, “The Food Habits <strong>of</strong> a Nation,” August 14, 2006.
118 Ibid.; EIU, <strong>India</strong> Food: Sub-Sector Update, November 11, 2008.
119 DATAMONITOR, “Alcoholic Drinks in <strong>India</strong>,” December 2008, 11.
120 DATAMONITOR, “Spirits Drinks in <strong>India</strong>,” November 2008, 11.
121 Industry <strong>of</strong>ficial, interview by Commission staff, New Delhi, <strong>India</strong>, May 4, 2009.
122 Ibid.
123 EIU, <strong>India</strong> Food: Sub-Sector Update, November 11, 2008.
124 Ibid.
125 JBC International Inc., “Comprehensive Study <strong>of</strong> the <strong>India</strong>n Wine Market,” August 21, 2008, 6.
126 Ibid.; DATAMONITOR, “Wine in <strong>India</strong>,” December 2008, 11.
127 JBC International, Inc., “Comprehensive Study <strong>of</strong> the <strong>India</strong>n Wine Market,” August 21, 2008, 6. This
study defined the upper class for its study as the top 2 percent <strong>of</strong> this population <strong>and</strong> finds that this class is
characterized by its monetary means, international experiences, <strong>and</strong> lifestyle, all <strong>of</strong> which expose them to
wine.
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