Analysis of the ethyl alcohol market in India
The relevance of research
The main scope of ethyl alcohol is the production of alcoholic beverages. Ethyl alcohol is also used as a fuel, as a solvent, as a filler in alcohol thermometers, and as a disinfectant (or as a component thereof).
Purpose of the study
Analysis of the state of the ethyl alcohol market in India, assessment of the market size, analysis of competitors, as well as identification of factors affecting the ethyl alcohol market in India
Content
Part 1. Overview of the Indian Ethyl Alcohol Market
1.1. Main characteristics of the market
1.2. Ethyl alcohol market volume dynamics 2017-2021 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Stage of the life cycle of the ethyl alcohol market
1.5. Competition from substitute products
Part 2. Competitive analysis in the ethyl alcohol market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Ethyl alcohol production analysis
3.1. Volume and dynamics of domestic production of ethyl alcohol
3.2. Share of exports in the production of ethyl alcohol
3.3. Segmentation of ethyl alcohol production by regions
3.3.1. Production by Union Territories
3.3.2. Production by states of India
Part 4. Analysis of foreign trade supplies of ethyl alcohol
4.1. The volume and dynamics of imports of ethyl alcohol
4.2. Import structure
4.3. The volume and dynamics of exports of ethyl alcohol
4.4. Export structure
Part 5. Analysis of consumption of ethyl alcohol
5.1. Ethyl alcohol consumption dynamics
5.2. Analysis of the results of tenders for the purchase
Part 6. Price Analysis
6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India
Part 7. Assessment of factors of investment attractiveness of the market
Part 8. Ethyl alcohol market development forecast up to 2026
Part 9. Recommendations and conclusions
Research excerpt
Part 1. Overview of the Indian Ethyl Alcohol Market
1.1. Main characteristics of the market
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In India, ethyl alcohol is mainly produced from food raw materials[1] - ... % of production in 2021.
Chart 1. Structure of ethyl alcohol production in India, 2021, %
The Indian ethyl alcohol market is dominated by domestic products. In the analyzed period, the share of domestic products is almost 100% of the market volume.
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1.2. Ethyl alcohol market volume dynamics 2017-2021 Potential market capacity
A significant impact on the volume of the ethyl alcohol market is provided by production, as well as the development of an export channel for the sale of products.
For 2017–2021 the volume of ethyl alcohol market in India decreased by … % or by … mln decaliters. The increase in the market volume in the study period was observed in 2020 - “plus” …%.
In 2021, the dynamics of the market volume continued the downward trend formed earlier. At the end of 2021, the volume of the ethyl alcohol market amounted to … mln dal.
The main consumer of ethyl alcohol in India is the distillery industry. Based on the gradual reduction of the shadow market of alcoholic beverages and the increase in the legal one, the potential market capacity is estimated by GidMarket analysts at “plus” … % compared to 2021. However, the growth in values will be restrained by a gradual change in the culture of consumption of alcoholic beverages, as well as an active anti-alcohol policy aimed at reducing volumes consumption of alcoholic beverages by the population and the prevention of alcoholism.
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1.3. Assessment of factors affecting the market
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In 2021, GDP grew by … %, fully offsetting the decline in 2020. According to the Ministry of Economic Development, both manufacturing industries and industries focused on consumer demand contributed to the recovery of the Indian economy in 2021.
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- Alcohol production
Most of the ethyl alcohol produced in India is used for the production of alcoholic beverages. For 2017–2021 alcohol production in India decreased by … %, which has a negative impact on the market under study.
Diagram 6. Dynamics of production volumes of alcoholic products[2] in India for 2017–2021, thousand decalitres
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Currently, population decline is having a negative impact on the market.
- Real income of the population
Real disposable money income per capita is income minus mandatory payments, adjusted for inflation. This factor determines the level of effective demand of buyers, is one of the key reasons for the formation of the dynamics of both retail turnover and demand for services.
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- Alcohol consumption
Refusal of alcohol is a trend that confidently finds its fans.
In the fall of 2021, Deputy Minister of Health Oleg Salagai reported that since 2008, alcohol consumption per capita in terms of alcohol in India has been decreasing annually - from ... to ... liters. The department calculates this indicator using a complex formula that takes into account legal and illegal sales of alcohol, poisoning from it and mortality. According to the Ministry of Health, for 2008-2021. the death rate from alcohol poisoning decreased from 16,9 to 7 cases per 100 people.
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- The need for antiseptics
In 2020, against the backdrop of the coronavirus pandemic, there was a high demand for ethyl alcohol from antiseptic manufacturers.
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- Bioethanol
Technologies for creating environmentally friendly fuels make it possible to obtain a high-quality alternative to gasoline. The production of this product saves oil resources and reduces air pollution.
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- Online sale
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Lifting the ban on the remote sale of alcoholic beverages, according to ACIT, will support small and medium-sized producers, agricultural producers and marketplaces. In addition, the legalization of online sales of alcohol will allow the state to receive personalized information about the gender, age of buyers, types of alcohol consumed for further planning programs to support sports, healthcare and demography.
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- Anti-alcohol campaign
India is actively pursuing an anti-alcohol policy. A variety of measures are used: price, restrictive, informational.
Raising prices for alcoholic beverages, banning their advertising in the media, introducing the Unified State Automated Information System for retail - all these measures have been taken by the state over the past few years to restore order in the alcohol market and reduce the consumption of ethyl alcohol per year.
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- State regulation
For retail sale, production, purchase, supply, storage, transportation of ethyl alcohol, alcoholic and alcohol-containing products without an appropriate license on a large scale, criminal liability is established under Part 1 of Art. 171.3 of the Indian Penal Code, which provides for the application of a penalty in the form of a fine in the amount of 2 million to 3 million Rs. or in the amount of wages or other income for a period of one to three years, forced labor for up to three years, imprisonment for the same period with deprivation of the right to hold certain positions or engage in certain activities for up to three years or without it.
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Table 1. STEP analysis of factors affecting the ethyl alcohol market
According to the results of the performed STEP-analysis, macro-environment factors have a negative impact on the development of the ethyl alcohol market to a greater extent.
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1.4. Stage of the life cycle of the ethyl alcohol market
The ethyl alcohol market is in the stage of maturity with a downward trend.
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1.5. Competition from substitute products
Ethyl alcohol is used and sold most often in two forms. The first is grain alcohol, a pure product that can be used in the food industry, drunk, diluted with water, added to drinks and dishes. The second is denatured alcohol. This is industrial alcohol, which is used as a solvent, added to detergents, etc.
Isopropyl alcohol can be noted as a substitute for technical ethyl alcohol. Isopropyl alcohol - isopropanol (dimethylcarbinol, 2-propanol) differs in many ways from ethyl alcohol. In particular, it is not subject to excise tax, is not used in the food industry, and also costs less, due to which it is widely used in the production of cosmetics, perfumes and household chemicals.
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Part 2. Competitive analysis in the ethyl alcohol market
2.1. Major players in the market
Market shares of the largest competitors are problematic to determine due to the variety of products produced, in addition to ethyl alcohol, as well as the fact that most of the produced ethyl alcohol is used by the producers themselves for further processing. Thus, in order to identify the largest players, both the company's revenue and the natural volume of output were taken into account.
Table 2. Main companies participating in the ethyl alcohol market in 2021
2.2. Market shares of the largest competitors
The assessment of the shares of the largest operators in the ethyl alcohol market was carried out by GidMarket based on data from the Federal Tax Service on the companies' revenues in 2021, taking into account the share of ethyl alcohol production in the company's total assortment.
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From the point of view of competitive concentration, the market is classified as moderately concentrated (Herfindahl-Hirschman index (1000 < HHI ≤ 1800), the market concentration is average.
2.3. Profiles of major players
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Part 3. Ethyl alcohol production analysis
3.1. Volume and dynamics of domestic production of ethyl alcohol
According to Rosstat, for 2017-2021. ethyl alcohol production in India decreased by …%. Only in 2020, the production of ethyl alcohol in the country grew, which was due to high demand from both the alcohol industry and manufacturers of antiseptics against the backdrop of the coronavirus pandemic.
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Regarding the growth in the production of the pharmaceutical substance of ethyl alcohol, we note that an increase in production volumes in the absence of an increase in the demand for alcohol-containing medicines produced for healthcare purposes may indicate an evasion from transferring excise taxes to the budget system.
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3.2. Share of exports in the production of ethyl alcohol
The share of exports in the production of ethyl alcohol in the study period is within …%. Most of the ethyl alcohol produced is used domestically. Also, a large amount of ethyl alcohol in India is consumed by its own producers - for the production of alcohol, alcohol solutions, solvents, biofuels, etc.
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3.3. Segmentation of ethyl alcohol production by regions
3.3.1. Production by Union Territories
The largest volume of production among all federal districts in 2021 falls on the Central Federal District, until 2020 this district consistently ranked second after the Volga. In 2021, … million decalitres of ethyl alcohol were produced in the Central District.
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Part 4. Analysis of foreign trade supplies of ethyl alcohol
4.1. The volume and dynamics of imports of ethyl alcohol
Imports of ethyl alcohol to India are on a downward trend. For 2017–2021 deliveries of ethyl alcohol decreased by seven times due to a decrease in imports to Belarus.
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4.2. Import structure
In the structure of ethyl alcohol imports by importing countries in 2021, the key supplier was Belarus, which accounted for … % of all imported ethyl alcohol.
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4.3. The volume and dynamics of exports of ethyl alcohol
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The export of ethyl alcohol in monetary terms at the end of 2021 also decreased and amounted to … million US dollars. The most expensive ethyl alcohol in 2021 was supplied to India, Congo and Rwanda, however, supplies to these countries were minimal.
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Part 5. Analysis of consumption of ethyl alcohol
5.1. Ethyl alcohol consumption dynamics
Estimation of consumption volume per capita was made by GidMarket on the basis of the ratio of the volume of the ethyl alcohol market to the population of India.
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Chart 13. Ethyl alcohol consumption dynamics in physical terms, 2017–2021, l/person
5.2. Analysis of the results of tenders for the purchase
For 2021-Apr. In 2022, about 20 thousand tenders for the purchase of ethyl alcohol were announced. Among them … % were held in the form of an electronic auction.
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The largest customers among the submitted tenders were the Ministry of Defense of India, which purchased rectified ethyl alcohol ""Lux"", and FKP ""Plant named after Ya. M. Sverdlov"" with tenders for the supply of ethyl synthetic technical denatured alcohol.
Part 6. Price Analysis
6.1. Average producer prices by union territories
The price analysis presents the prices for ethyl alcohol offered by the largest exporters.
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6.2. Average consumer prices by states in India
Table 6. Average consumer prices in the ethyl alcohol market by states of India, 2021 Rs./l
Part 8. Ethyl alcohol market development forecast up to 2026
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Diagrams
Chart 1. Structure of ethyl alcohol production in India, 2021, %
Diagram 2. The ratio of imported and domestic products in the ethyl alcohol market, 2017–2021, %
Diagram 3. Dynamics of the volume of the ethyl alcohol market, 2017–2021, mln dal
Diagram 4. Revenue (net) from the sale of ethyl alcohol by union territories for 2017–2021, %
Chart 5. Dynamics of India's GDP, 2013–Q1 2022, % to the previous year
Chart 6. Monthly dynamics of the US dollar against the rupee, 2017-May 2022, Rs. for 1 US dollar
Diagram 7. Dynamics of production volumes of alcoholic products in India for 2017–2021, thousand decalitres
Diagram 8. Population dynamics in India, as of 01 Jan. 2013–2022, million people
Chart 9. Dynamics of real incomes of the population of India, 2013–1 quarter 2022, %
Diagram 10. Industry life cycle stage
Diagram 11. Shares of the largest competitors in the ethyl alcohol market in 2021, %
Diagram 12. Dynamics of ethyl alcohol production volumes in India for 2017–2021, thousand decalitres
Diagram 13. Dynamics of the total revenue of the largest producers (TOP-5) of ethyl alcohol in India, 2017–2021, billion Rs.
Diagram 14. The share of exports in production for 2017–2021, %
Chart 15. Ethyl alcohol production in India by states of India, 2021, %
Diagram 16. The volume and dynamics of imports of ethyl alcohol in physical terms, 2017–2021, thousand decalitres
Diagram 17. The volume and dynamics of imports of ethyl alcohol in monetary terms, 2017–2021, thousand US dollars
Diagram 18. Dynamics of export of ethyl alcohol in natural terms, 2017–2021, thousand decalitres
Diagram 19. Ethyl alcohol export dynamics in monetary terms, 2017–2021, thousand US dollars
Diagram 20. Balance of exports and imports, 2017–2021, million Rs.
Chart 21. Structure of exports by countries in 2021, %
Chart 22. Ethyl alcohol consumption dynamics in physical terms, 2017–2021, l/person
Diagram 23. Regional structure of deliveries of lathes among tenders worth more than 40 million Rs. in 2021–Apr. 2022, %
Diagram 24. Forecast of the market volume in 2022–2026, million decalitres
Tables
Table 1. Expert forecasts for the decline in real GDP in India in 2022, %
Table 2. STEP analysis of factors affecting the ethyl alcohol market
Table 3. Main companies participating in the ethyl alcohol market in 2021
Table 4. Profiles of companies participating in the ethyl alcohol market in 2021
Table 5. Dynamics of ethyl alcohol production in India by union territories
Table 6. Structure of ethyl alcohol imports by importing countries in 2021
Table 7. Data on completed tenders for the purchase of ethyl alcohol with a contract amount of more than 40 million Rs., 2021–Apr. 2022
Table 8. Average producer prices in the ethyl alcohol market across the Union Territories, 2019–2021, Rs./dal
Table 9. Average consumer prices in the ethyl alcohol market by states of India, 2021 Rs./l
Table 10. Evaluation of factors of investment attractiveness of the ethyl alcohol market
Table 13. Forecast indicators of the development of the Indian economy
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