Updated: April 17, 2020 10:53:38 pm
After clocking 25 per cent year-on-year growth, microbreweries in Maharashtra have hit a roadblock that might result in almost 92 per cent of 20-odd functional breweries to shut down.
Manu Gulati, executive director, Maharashtra Chapter Craft Brewers Association of India (mCBAI), said the long lockdown has dealt a debilitating blow to the business of craft breweries.
Over the past three years, microbreweries have made a mark in various parts of the state. These entrepreneur-driven enterprises, which rely heavily on labour, brew their own beer and sell it in their own premises. Industry estimates say investment worth Rs 100 crore has been pumped into the sector over the past three years, with the sector paying annual excise revenue of over Rs 10 crore.
However, since the lockdown, among the first to get hit was this sector as existing laws do not allow retail sale of handcrafted beer.
“Our produce can be sold only at restaurants, clubs or festivals. Since the hospitality industry was the first to down its shutters in the wake of the COVID-19 crisis, our business has come to a standstill,” he said. Unlike machine crafted beer, the shelf life of handcrafted beer is shorter. It expires in a span of a month or so. Gulati estimates that around 1.5 lakh litres of handcrafted beer would have to be drained out from the cellars of microbreweries as it has gone past its due date.
“The excise and VAT (value added tax) on brewed beer has already been paid and we have made a presentation to the government asking for a refund,” he said.
But the biggest worry for these players, Gulati said, was the extended lockdown and strict norms of social distancing, which would be required to be followed even after the lockdown was lifted.
“Logically, restaurants would be the last to open and as we are not allowed retail sales, chances of the breweries getting back on their feet soon seems remote,” he said.
According to a recent poll conducted by mCABI, an overwhelming 92 per cent craft breweries in the state may not be able to survive more than one to two months, given current costs if social distancing or lockdown measures stay. The remaining 8 per cent are concerned that they will not even be able to make it through the month.
Aniruddha Patil, who has seen the food and beverages industry change over the past 15 years, talked about the popularity of the craft beer industry in India.
“This pandemic has resulted in unprecedented loss for restaurants but also presents us with opportunities that will help the industry recover and grow,” he said.
As a way forward, Gulati said the state government could tweak its existing law and allow retail sales of handcrafted beer. “It does not require much change, like other beer, and allow us also to sell in retail. This will not only save the industry from extinction but also ensure government revenue remains safe,” he said.
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