India looks set to consolidate its somewhat unexpected position as the world's largest whisky market in 2003, stretching further ahead of its nearest rivals, according to a new report from market analysts Canadean.
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Consumption in the sub-continent is growing at a much faster rate than the global average, the report claims, with an estimated increase of around 6.5 per cent for 2003 compared to less than 2 per cent for the market as a whole.
This strong performance has been driven by Indian molasses whisky, which accounts for over 90 per cent of total sales yet continues to expand steadily. But India also appears to be displaying a growing preference for the more widely known malt-based whisky, with Indian malt whisky predicted to grow by around 11 per cent in 2003 and by a further 25 per cent by 2005. The rapid growth in rum and vodka may, however, pose a threat in the medium to long term, Canadean suggested.
As for India's chief rivals, the report predicts a slight decline in consumption in the US, where the market has now receded in four of the last five years. American consumers are able to choose from an exceptionally wide choice of alternative alcoholic drinks, many of which are more versatile than whisky or whiskey. Furthermore, the very high number of products on the market has only served to dilute the marketing resources available to any individual brand.
The recent falls seen in bourbon and American whiskey look like continuing in 2003, as does the long term decline of standard Scotch. Malt and Irish whiskey do, though, offer some cause for optimism, Canadean suggests.
Thailand is the third largest whisky market and second in Asia only to India, but since the 1997 financial crisis, consumers have been attracted towards lower priced drinks such as beer. The increased availability of cheaper drinks has affected both locally produced whisky and premium brands. In contrast, inexpensive imported brands are flourishing, with standard Scotch and Japanese whisky predicted to advance by 9 per cent and 28 per cent respectively.
Whisky has also endured a tough year in the fourth and fifth largest markets. Poor tourism and a weak economy have taken their toll in Spain, while a shift towards lower priced alcoholic drinks has depressed consumption in Japan.
As far as the various whisky categories are concerned, standard Scotch is still the overwhelming best seller, although consumption is expected to show only a very minor increase in 2003 compared with the previous year. Premium whiskies, on the other hand, are experiencing better fortunes, with Scottish malt whisky and deluxe Scotch predicted to rise by 3.5 per cent and 5 per cent.
Growth is expected to continue for whisky/whiskey worldwide over the next two years, according to Canadean, although at modest levels only. The strong performance of India, where sales could be boosted even further by further recent moves to reduce import duty of Scotch to 150 per cent, as well as a recovery in Spain and encouraging increases in countries such as South Korea and South Africa should more than compensate for the losses predicted to take place in other markets, the report concludes.