The Indian Liquor Industry Prohibition Story

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Excerpts

The Indian liquor industry is divided into two broad segments:Indian Made Foreign Liquor (IMFL) and country-made liquor. IMFL comprises alcoholic beverages that were developed abroad but are being made in India (whisky, rum, vodka, beer, gin and wine), while country-made liquor comprises alcoholic beverages made by local breweries. While many Indian and MNC players were present in the IMFL segment, the unorganized sector accounted for almost 100% of the country-made liquor segment...

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Soon after independence, prohibition was imposed in the erstwhile state of Bombay. The first large-scale movement against alcohol began in the 1970s, when rural women in various parts of the country protested against the sale of liquor in their villages...

The efficacy of prohibition to curb alcohol consumption became questionable when it became known that the availability of alcohol actually increased in Haryana and AP after prohibition, albeit at higher prices. The experiences with prohibition all over the world prove that it is extremely difficult to make it a success...

Following the accident, the GoI filed a compensation lawsuit against the UCC for an estimated US$3 billion. However, UCC felt that the GoI was to blame for the disaster. In December 1986, UCC filed a countersuit against the GoI and the State of Madhya Pradesh...

Exhibit I: The Indian Liquor Market