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High molasses prices may turn alcohol costlier

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Tipplers may have to shell out more as has become dearer by 75 per cent in the past one year.

“Prices of low-end brands in India Made Foreign Liquor (IMFL) segment may go up by 15-20 per cent in the next couple of months,” liquor retailing major Chadha Group CEO Raju Chadha said.

According to All India Distilleries Association (AIDA), molasses prices have increased to Rs 6,500-7,000 a quintal which is about 75 per cent higher than the prevailing price last April.

The total IMFL market in India is estimated at around 190 million cases an annum and the molasses-based liquor accounts more than 90 per cent of it.

Another major player in the liquor industry, Radico Khaitan, said it is also looking at upward revision in the prices of some of its brands.

“Molasses based accounts for over 90 per cent of the total liquor consumed in the country. We will have to revise the prices of our low end brands of IMFL, to offset the increase in the price of raw materials,” Radico Khaitan COO Raju Vaziraney said.

Meanwhile, UB Group promoted United Spirits, the largest liquor manufacturer in the country, was not available for comment.

The price hike would be prominent in the low-end brands because they operate at a low margin, while high end brands may be able to absorb the shock, Chadha said.

However, he said in case of country liquor, which is completely controlled by the government, there wouldn’t be any increase in the prices.

“Last year, molasses was available at about Rs 4,000 a quintal. But with the shortage of sugarcane in the current season, the prices have gone up to Rs 7,000,” AIDA Director General B N Raina said.

He said alcohol prices have shot up to Rs 28-29 a litre from Rs 19-20 a litre last year. “Prices may go up further to Rs 32 by the end of the current season,” he added.

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