Aamir Shaik Khalid

Chennai

23 August 2024

Newer alcohol brands may see a drop in sales if India bans surrogate advertisements, say analysts tracking the alcohol industry.

“Brands like Bira and Simba will find it difficult to compete in the alcohol market,” said an analyst, who did not want to be named. Surrogate advertisements use subliminal messages to promote alcoholic products. Bira 91, a craft beer brand owned by B9 Beverages Ltd, is India’s fourth-largest beer company and has a market share of 5% in the alcohol industry. Simba is a craft beer brand owned by Sona Beverages Private Limited and has an annual revenue of Rs 246 crore.

Pratik Prajapati, an analyst from Motilal Oswal, said ban on surrogate advertisements could diminish brand image of the smaller companies. Bira, however, said the proposed ban on surrogate advertising will not affect it. “Bira has a strong social media presence and online market, and we don’t fully rely on advertisements,” said Avnish Bhutra, Senior Manager at Bira.

The Cable Television Network Amendment Bill, prohibits the direct promotion of alcoholic products.

In 2024, the alcohol industry’s revenue touched $52.7bn with the average volume consumed per person at 7.46 liters. India’s alcoholic beverage market is ranked sixth globally in terms of revenue generation.

The top three companies in the segment include United Spirits, United Breweries and Radico Khaitan
Limited. Bhutra said big brands like Diageo invest heavily in surrogate advertisements, spending between Rs 5 crore – Rs 50 crore. “The ban might lead to a hike in duties set by the Indian government, increasing alcohol prices,” said Prajapati.