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Premium alcobev grew at 10.2% CAGR in 2022-2025; ISWAI sees smaller cities driving the next premiumisation phase
ISWAI estimates the domestic alcoholic beverages market at Rs 6.2 lakh crore in calendar year 2025, with tier-one cities already saturated. Tier-2 cities are expected to lead the next premiumisation phase, while cheap and regular segments grew 1.1% and 1.4% respectively.
The numbers
Figures from Financial Express,
| Alcobev tax revenues, FY25: | Rs 4 lakh crore |
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Why it matters for the brand
Premium grew at a 10.2% CAGR in 2022-2025 against 1.1% for cheap and 1.4% for regular, and ISWAI expects smaller cities to lead the next phase, so trade-up ranges and distribution there deserve priority over mass-tier volume.
The counter-case
The case against this reading — not reported by the source.
This is a lobby body's report, and the numbers are chosen to support its policy ask. The 10.2% premium CAGR is set against cheap (1.1%) and regular (1.4%) tiers, but the tier boundaries are not disclosed. If price bands are fixed in nominal terms, inflation and brand upgrades push products into 'premium' by definition, so part of the gap is reclassification rather than consumer trading-up. The source also does not say whether growth is in volume or value. Value growth driven by state excise hikes and price increases would overstate real demand. The 'smaller cities drive the next phase' claim is a forward-looking assertion, and the signal cites no data on small-town premium penetration. Two tax figures are hard to reconcile: Rs 6.2 lakh crore of market in calendar 2025 against Rs 4 lakh crore of tax in FY25 implies a very high tax share or mismatched bases (retail value vs. producer value, calendar vs. fiscal year). The low 2.5% import share is a volume figure, so it hides the larger value share of imports and says nothing about the risk from trade-deal tariff cuts. The call for three-to-five-year policy visibility is a request, not a forecast, and states have repeatedly changed excise policy at short notice.