India's Liquor Brands Are Ditching The Mass Market

India's Liquor Companies Chase Premium As Mass Market Gets Squeezed Out

By Pritha Pahari

What?

India's mass market alcohol segment is losing ground to rising taxes, shrinking margins, and companies that have shifted their attention to premiumisation. "The regular segment is more or less seeing flattish growth, or maybe to a certain extent a small decline," said Ajay Thakur, lead analyst for consumer staples at Anand Rathi Shares and Stock Brokers.

Overall spirits volumes fell around 2% in FY2025, following a 3% drop in FY2024, according to Investment Information and Credit Rating Agency of India. Premium and super-premium spirits, meanwhile, grew 9-12% in both volume and value through 2025. Diageo India's latest results show this divide plainly; its Prestige and Above portfolio grew 5% year-on-year and accounted for over 90% of net sales, while its Popular segment, less than 9% of sales, fell 13.2%.

Radico Khaitan, Allied Blenders, and Pernod Ricard are all reporting the same pattern. The premium end is growing. The mass end is not.

Why?

State excise policies across India's 28 states have made the mass market hard to run profitably. Governments rarely allow price increases in the regular segment, so companies absorb rising costs with shrinking margins.

Two recent policy shifts have added pressure. Maharashtra introduced a locally made grain spirit in mid-2025, priced below mainstream IMFL, pulling some consumers away from regular brands. Karnataka's 2026-27 budget changed how excise is calculated, and industry bodies say lower Indian Made Foreign Liquor (IMFL) slabs have already seen around 6% degrowth as a result.

Faced with this, companies have started selling off mass market brands rather than running them at a loss. Diageo sold 32 popular brands in 2022. Pernod Ricard sold Imperial Blue to Tilaknagar Industries in December 2025 for Rs 4,150 crore. Both said they wanted to focus resources on premium growth.

What's Next?

The situation is unlikely to change quickly. State governments are not expected to ease excise burdens on the popular segment. Companies will keep putting money behind premium labels where returns are better. Younger consumers are coming into the market and going straight to mid and premium products, which gives companies less reason to invest at the bottom.

The mass market will not disappear overnight, but it is being deprioritised, and there is no clear sign of who steps in to serve that consumer next.

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1.90 lakh units

That's how many passenger vehicles Maruti Suzuki sold in the domestic market during May 2026, its highest-ever monthly sales figure, up 40% year-on-year. The market leader's performance helped drive industry-wide wholesales to an estimated 4.4 lakh units, powering the growth despite recent fuel price hikes.

Catch Up Quick: Tata Motors and Mahindra & Mahindra also delivered solid results, with domestic sales rising 42% to 59,090 units and 11% to 58,021 units, respectively. Hyundai grew 9.1% to 47,837 units, while Toyota posted modest 4% growth at 30,574 units.

M&M Automotive CEO Nalinikanth Gollagunta noted that sustained demand across its portfolio remains constrained by supply chain challenges due to manpower shortages at select suppliers.

Setup: Kia India reported May sales of 27,586 units, up 23.6% year-on-year, reflecting broad-based momentum across the industry as the new fiscal year gathers pace.

Zee Lands FIFA World Cup Rights

FIFA has struck a deal with Zee Entertainment to broadcast the 2026 World Cup in India, according to a Reuters report. The agreement comes just 10 days before the tournament kicks off on June 11 across the United States, Canada and Mexico. Zee shares rose around 7% on the day of the announcement.

The Lead: The deal ends a prolonged rights battle that dragged on for months. FIFA had initially sought about $100 million for the 2026 and 2030 World Cup rights in India before cutting its ask to $60 million. JioStar, which aired the 2022 World Cup through predecessor Viacom18, offered $20 million and was rejected. Sony held talks but did not bid. Financial terms of the Zee deal were not disclosed.

Setup: One factor that complicated FIFA's sales efforts throughout and kept broadcaster appetite subdued was timing. Unlike the 2022 Qatar World Cup, which Viacom18 paid about $60 million to air in favourable time zones, most of this year's matches will be screened late at night in India due to the time difference with the Americas.

Manufacturing Growth Accelerates

India's manufacturing activity accelerated to a three-month high in May, signalling resilience in the country's factory sector despite rising cost pressures. The HSBC India Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 55.0 ​in May from April's 54.7, indicating robust expansion in output, new orders and employment.

Setup: Manufacturers reported strong domestic demand, which helped drive production and boost hiring. Companies also increased purchasing activity and maintained positive business sentiment. However, firms faced higher input costs, particularly for raw materials, prompting many to raise selling prices.

Critical Moment: Despite cost pressures, business sentiment remained positive. Pranjul Bhandari, chief India economist at HSBC, said manufacturers continued to benefit from "robust demand conditions", with output and new orders expanding at a faster pace during the month.

Iran War Prompts Alt Fuel Surge

India's fuel price surge, triggered by the West Asia war-linked energy shock, is reshaping consumer preferences at Maruti Suzuki. The automaker on Monday reported record monthly sales of around 78,000 CNG vehicles in May, with bookings jumping 40%. This follows at least four petrol and diesel price hikes during the month.

Demand for cleaner alternatives has also spiked for Tata Motors. Last week, it reported that EV demand has doubled in the two months since the conflict began, prompting plans to raise monthly production capacity from 10,000 to 15,000 units.

The Lead: On price hikes, Maruti's senior executive officer Partho Banerjee said the company had "no choice" but to pass on higher costs to customers, citing soaring crude prices, raw material costs, supply-chain disruptions and labour issues.

The Shift: Bookings for Maruti's all-electric e-Vitara has doubled to over 4,000 units. However, Banerjee cautioned that sustained fuel price increases would inevitably weigh on the broader auto industry.

Telangana Protects Gig Workers

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Catch Up Quick: The move comes as India's gig economy expands rapidly, with NITI Aayog projecting the country's gig workforce could exceed 2.3 crore workers by 2030. Gig workers, particularly delivery riders, have also faced growing scrutiny over working conditions, including exposure to extreme heat, long hours and income insecurity. Worker groups have raised concerns about opaque payment systems, sudden account deactivations and limited social protections. 

Pivot: Telangana's new law seeks to address some of these issues by bringing gig workers under a formal regulatory framework. Besides mandating electronic payments, it requires platforms to register workers, contribute to a welfare fund and establish grievance redressal mechanisms.

Who Is Buying Or Selling In Indian Markets Right Now

On Episode 890 of The Core Report, financial journalist Govindraj Ethiraj talks to Gaurang Shah, Senior Vice President at Geojit Financial Services, as well as Dharmakirti Joshi, Chief Economist at CRISIL.

• Why global markets are now disconnected from war, geopolitics and rising prices.

• Will the RBI hike interest rates this week?

• Does it matter who is buying or selling in Indian markets right now?

• Why an India-Oman FTA is more than just that

• Negotiations for a deal to telecast the FIFA World Cup are almost as nail-biting as a final match