Despite crisis, Indians high on spirits

Global meltdown, sky-high inflation rate and gloomy economic outlook were of little concern to Indians in 2008, as they chose to be high on spirits, thus propelling the alcoholic beverage industry to register a handsome double-digit growth--or was it the case of drowning sorrows in drink. You decide.
Nevertheless, in a year that saw inflation touching a 13-year high of 12.82 per cent in August, the 150 million cases beer market grew by 15 per cent, according to All India Breweries Association figures.
The wine segment, which has a total market size of around 1.5 million cases, posted an even higher growth rate of 30 per cent, as per International Wines and Spirits Record, while other alcoholic beverages, with a market size of 190 million cases, grew at 15 per cent.
And all this happened amid spiralling prices of spirits, which shot up by up to 30 per cent in some parts of the country. The average price of generally consumed liquors ranges between Rs 600 and Rs 1,500 per bottle of 750 ml. High prices of molasses, the basic raw material for producing alcohol, had sky-rocketed forcing companies to pass on the increased input costs to tipplers.
However, on the corporate front, it was a rather quiet year in terms of big-ticket mergers and acquisitions, but the domestic landscape did feel the ripples of take-overs in the global arena.
A case in point is the 7.8 billion pounds take-over of Scottish & Newcastle, which owned 37.5 per cent stake in United Breweries, by a consortium of Carlsberg and Heineken, resulting in conflict of interests in India. Heineken got the rights of the Indian market, among others, of S&N. While it was already the single largest shareholder with 42.5 per cent in Asia Pacific Breweries (APB) -- its joint venture with Fraser & Neave -- Heineken also became the largest single stakeholder in United Breweries too. APB wanted to bring its flagship Tiger beer to India, which the UB Group resisted, as it directly competed with Kingfisher. UB Group also opposed the entry of Heineken nominee on its board.
In a similar situation, Belgian brewer InBev acquired US-based Anheuser Busch for USD 52 billion. Both companies were already competing in India through separate joint ventures.
InBev has a joint venture with India's biggest Pepsi bottler, Ravi Jaipuria group, in which the Belgian beer maker had a minority 49 per cent stake and Anheuser Busch had operations in the country through its JV with Crown Beer International.
Post their merger on international turf, the two companies began negotiations for amicable solution for conducting business in India.
UB Group firm, United Spirits, was also in the news for its talks with world's number one liquor manufacturer, Diageo, for a possible stake sale. While the company admitted it had received certain 'unsolicited' proposals from a host of companies, it did not divulge the details.
The domestic liquor industry, nevertheless, witnessed some acquisitions mainly in the form of companies taking over brewers. UK-based Cobra Beer picked up 76 per cent stake in Bihar-based brewery Iceberg Industries Ltd and also acquired the Iceberg beer brand for an undisclosed sum.
United Spirits agreed to acquire its contract manufacturing unit Balaji Distilleries in Tamil Nadu in an all-stocks deal. The distillery has been contract manufacturing for UB Group ever since its inception in 1983. The only outbound acquisition came in the form of homegrown liquor firm Champagne Indage taking over the consolidated assets of UK-based Darlington Wines, which had an estimated revenue of 25 million in 2007.
The iconic liquor player Shaw Wallace & Company Ltd also faded into history in April when the shareholders of the company approved a scheme of amalgamation that sought to merge Shaw Wallace & Company with the UB Group company, United Spirits Ltd.
In terms of new brands making debut in India, the controversial Tiger beer by APB stood out, despite unhappiness expressed by the UB Group. German firm Radeberger Gruppe, along with Dalmia Continental, added fizz to teetotallers' night-outs with its non-alcoholic beer, Clausthaler.
The wines segment also saw new brands like Celesta by Baramati-based Nira Valley Grape Wines, while United Spirits also started selling its products in the country.
The stock market meltdown in the country took its toll on the liquor segment too. Delhi-based Globus Spirits Ltd's plan to raise Rs 68 crore from the public came crashing. Even after receiving market regulator SEBI's nod in early January, the company had to shelve its IPO indefinitely.
While everybody awaits an upturn in the economy, liquor makers do not seem to be unduly worried as tipplers drink anyway, be it for a happy occasion or to gulp down woes.

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The world's largest economies

India
The Indian economy is the 12th largest in the world. That is, India's gross domestic product stands at $1.171 trillion.
However, in terms of purchasing power parity, India is the world's fourth largest economy. Its GDP in purchasing power parity terms is at $3.092 trillion.
These are the year 2007 figures, recently released by the World Bank.
By definition, purchasing power parity (PPP) is an economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.
India is the one of the world's fastest growing economies, yet its annual per capita income remains quite low at $950, or about Rs 40,000. That puts India in the 160th spot.
Incidentally, World Bank figures show that the world's GDP is at $54.347 trillion. India accounts for just over 2 per cent of global GDP.
1. United States
The American GDP is at $13.812 trillion, making it the world's largest economy. It accounts for more than 25 per cent of the entire world's GDP!
In terms of purchasing power parity too, the United States is the world's leading economy.
However, its per capita income at $46,040, per year, pegs it at the 15th spot in the world.
2. Japan
Japan, with a GDP of $4.377 trillion, is the world's second largest economy.
However, in terms of purchasing power parity, Japan is ranked third by the World Bank. It's GDP in PPP terms is $4.283 trillion.
Japan's per capita income (annual) is $37,670, making it the 25th highest in the world.
3. Germany
Germany is the world's third largest, with its GDP at $3.297 trillion.
But in PPP terms, Germany is the world's fifth largest economy. It's GDP in PPP terms is at $2.752 trillion.
Its per capita income is the 23rd highest in the world, at $38,860.
4. China
China, the Asian giant, is the world's fourth largest economy with a GDP of $3.281 trillion; but in purchasing power parity terms it ranks second at $7.055 trillion.
It is the world's fastest growing major economy and its giant strides have taken the world by a storm. Economists predict that over the next few decades, it could topple the US as the world's largest economy.
China's per capita income, however, is still low at $2,630 per year.
5. United Kingdom
Britain is the world's fifth largest economy. Its GDP is at $2.728 trillion.
In purchasing power parity terms, the United Kingdom's GDP stands at $2.082 trillion making it the seventh largest in the world.
Britain is a rich nation. Its per capita income is at an impressive $42,740. That would rank it in the 19th spot
6. France
The French GDP is at $2.563 trillion, making it the world's sixth largest economy; but in terms of PPP, it is the world's 8th largest (GDP in PPP terms, $2.054 trillion).
The per capita income of the French at $38,500 makes them the 24th richest people in the world.
7. Italy
Italy's GDP in absolute terms is at $2.107 trillion. That makes it the planet's seventh largets economy.
However, in purchasing power parity terms its GDP is at $1.780 trillion and its rank is 10th.
Italians' per capita income is the 30th highest in the world. It is $33,540.
8. Spain
Spain is the eighth largest economy with its GDP at $1.429 trillion. In purchasing power parity, however, it slips to the 11th spot ($1.373 trillion).
With a per capita income of $29,450 per year, its people are the 36th richest in the world.
9. Canada
The Canadian GDP stands at $1.326 trillion, making it the world's ninth largest economy.
In PPP terms, however, it stands 14th in the world. Its GDP in PPP terms is at $1.178 trillion.
Its people enjoy a comfortable life with a per capita income of $39,420, which is 22nd highest in the world.
10. Brazil
The Brazilian economy too has been growing at a scorching pace. It is the world's 10th largest economy with a GDP of $1.314 trillion.
But in terms of purchasing power (GDP - $1.834 trillion), it is better placed at number 9.
Amongst the emerging economies, it has one of the best per capita income figures -- $5,910. This places it in the 85th spot in the world
11. Russian Federation
In absolute GDP terms, Russia -- at $1.291 trillion -- is the world's 11th largest economy., but it jumps to the 6th spot in terms of purchasing power parity ($2.088 trillion).
Its per capita income is at $7,650, the 78th highest in the world.