The summer was supposed to be peak season for the beer market, but the lockdown has hit it bad. Here's how industry insiders are coping and what their post-lockdown plans are
Many beer pubs record 50 per cent of their annual sales between March and June
Riday Thakur runs a beer and hard liquor distribution business from a warehouse based in a South Mumbai locality. It's a traditional two-storey structure that's emblematic of the industrial neighbourhood, with different stocks segregated in mountainous piles and an office area where employees carry out business operations. Usually, the place is buzzing with activity, with workers loading and unloading cases daily to distribute beer to outlets across a thirsty city. But right now, the building is under lock and key. The piles are gathering dust. Thakur can't even open its shutters to examine the desolate interiors because we are in a dry state at present and thus the law has tied his hands. Even the loaded vehicles outside the warehouse are parked as they were in mid-March, and Thakur is concerned about an increasing spate of robberies that have taken place, with desperate addicts and potential bootleggers breaking into the tempos for an illicit supply of liquor. That's why he requests us not to name the company he owns, or even the location of his warehouse. It's a cause for real concern if the information gets leaked, he tells us.
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Pouring misery
The entire situation reflects the hapless state that the beer industry finds itself in at a time when it was meant to be thriving, what with peak summer upon us. This is the season when tipplers take to the brew like ducks to water given the hot weather. "Around 50 per cent of our annual sales take place between March and June," says Vipul Hirani, co-founder of Crafters Taphouse, a beer bar in Powai. But he adds that the alarm bells started really ringing loud in 2020, in early last month. "That's when things started slowing down. We weren't getting the crowds that we used to because people were worried about the stories coming out of China. They were scared because the virus is an unknown entity. And then the Maharashtra government ordered that malls must be shut down on March 14 meaning we, too, had to close operations the next day because we are located in one," Hirani tells us.
Riday Thakur
That's how things stand to this day for all watering holes, but what does this impasse mean for the beer industry in particular? How has the business been affected in this challenging hour? The answer, we find, is different for different people. But let's take microbreweries like Crafters first.
When laws were first made for them in 2009, these establishments were allowed to sell their wares only onsite. That changed in 2014, when they were given the licence to package and sell their products to a second party. But there was a catch. They could only supply 5-litre kegs, and not bottles. So, their business was restricted to other bars and restaurants since wine shops were out of their purview. This means that even if liquor stores are reopened after the lockdown is partially lifted on May 3, the misfortune of microbreweries wouldn't have changed greatly because, as Hirani says, it's unlikely that pubs will be operational in the next few months. "The sad part is that there is no clear timeline about when we will be able to move our stocks again. The total inventory of tap houses and breweries in the state is about 1 lakh litres, with no avenues of selling that beer. And on top of raw material, I have already paid around '2.5 lakh to the excise department, which has turned out to be a useless expenditure so far," Hirani confides.
Thakur's concerns, though, have an added dimension. What if small and medium establishments he has already supplied beer to decide to throw in the towel even before the lockdown ends? How will he recover his money in that situation? He says, "It's too much of a short-term investment for some of them, hoping for returns in the long run. We have a distributors' association that takes steps. But if someone absconds, we are stuck."
Then there is the common issue about stationary stocks. Unlike whiskey or wine that mature with age, a keg of beer can perish in three months. And Thakur tells us, "Liquidating our supplies is thus the first thing we'll have to do once the lockdown is lifted, even if it means selling the bottles off with deep discounts."
Take-away solution
Of course, government aid would be a blessing at this hour. Thakur points out how his firm hasn't had any business for close to two months. So waiving the fixed cost of excise duties for this period would mean at least one less worry to think about; while Hirani adds that he employs a total of 1,400 people who are mostly locals from the state. That's another reason for the Maharashtra government to lower taxes, he tells us.
But what he would really like the government to do — and this is where one of the biggest hopes for microbreweries lies — is legalise growlers. These are plastic, ceramic, stainless-steel or glass containers in vogue in many countries like the US, Germany and China, which you can fill with beer and take away from a tap house or microbrewery — or buy from a shop — to enjoy within the comfort of home. Hirani says, "This is a conversation we have been having with the authorities for a while now, where we have been telling them that this is the direction in which the industry needs to go. See, restaurants have a mark-up. They might charge '300 for a growler that costs '100. Not everyone can afford that. But the same thing at a liquor store would cost '125, which would open up a much larger market for us. And it's not a big ask. All that's needed is one small tweak in the wine shop and microbrewery licences, and we hope that the government takes a productive approach towards this issue at this hard time."
Vipul Hirani
He adds, however, that whenever the issue of alcohol comes up, people in political circles talk about it as a "sin market". They start bringing up issues like violence and alcoholic husbands spending all their money on booze when, according to Hirani, a craft beer consumer is fairly more educated and reasonable than the average drunkard. It's thus anyone's guess as to whether these measures will indeed be implemented to give the beer industry some much-needed succour when their funds are running dry. Only time will tell the answer but meanwhile, warehouses will continue to gather dust and tempos will keep getting robbed of liquor, at least in the foreseeable future.
Tipple tattle
People in the US buy growlers after paying a desposit amount, and then refill it with beer after paying an addtional cost once the initial amount is over. The term is said to have originated in the 19th century, when people carried fresh beer from a pub to their homes in a galvanised peg. The sound of carbon dioxide escaping from the peg when the beer sloshed around inside sounded like a growl.
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