Liquor Ban will collapse Liquor stocks. Get out now!

CM Nitish Kumar says will ban liquor in Bihar from April 1 next year

Bihar chief minister Nitish Kumar announced on Thursday the state would ban the sale of liquor from April 1, 2016 citing the adverse effect of alcohol on poor families and women, in line with an election promise made by the Grand Alliance.

“Increasing liquor consumption was also a major cause for domestic violence, particularly against women, and had contributed to a rise in crimes. Women are suffering more than anyone else due to increasing liquor consumption,” he said, speaking at an official function to mark Prohibition Day.

Liquor consumption is already prohibited in the states of Gujarat, Kerala, Manipur, and Nagaland.

The announcement sent stock prices of liquor makers crashing at a time when India has emerged as a hotly-contested market for global drink makers such as Diageo and Pernod Ricard. Shares of United Spirits fell 3.6%, United Breweries was down 2.9% and Radico Khaitan slumped 7.5%.

“The final modalities are still to be worked out,” Ajay Alok, a spokesperson for Janta Dal (United) told news channel CNBC TV 18.

Kumar said the poorest of the poor were consuming liquor that was badly hitting their families and children’s education.

“Though the government was generating a sizeable amount of revenue, the sale of liquor was having a bad impact on rural households,” he said.

“If they are happy, state’s development drive would get the necessary acceleration. We will find ways to make up for the possible Rs 4000 crore loss from this head.”

In July, Kumar had assured women self help groups (SHG) at a programme that he would impose prohibition if he retained power in the state elections, following repeated demands by women’s organisations to include the prohibition policy in the government’s Vision Document 2025.

Alcohol has often emerged as a contentious issue across the country with demands for prohibition cropping up in various states, often from women’s groups who say drunk husbands beat up wives and daughters, besides frittering away hard-earned income in poor households.

Prohibition has become an election issue in poll-bound Tamil Nadu with the DMK leading raucous state-wide protests.

The Kerala government has decided to close down about 700 bars as part of its plan to make the state alcohol-free by 2023 but the decision has been has been met with several challenges in court.

But such prohibitions have also often been described as regressive, an infringement of individual rights and ineffective, as exemplified by Andhra Pradesh rolling back a four-decade-old ban in 1997.

https://www.hindustantimes.com/indi...pril-1-2016/story-ngCUbUucvuvkZ4AkUzxFsO.html

 

a ban is only going to lead to bootlegging. sad!

 

Mukherji Sir, Do you think business of alcohol companies will be affected by a ban in just two states (kerala and bihar)? Gujarat State already has a ban (since many years) but they are trying to lift the ban.

 

Ban will surely affect,there will be reduction in consumption from being legal to illegal in Bihar.Bihar is large state .So growth of few years will go backwards and may take time to compensate from other markets.This is negative for Alcohol industry and there is always chances of it being followed by some other states as Nitish had garnered many female votes through this.All of us know females will always support such ban and they are a big vote bank.

 

Ban on a state will affect the stock price for a month or two. Bihar shares border of Jharkhand, West Bengal and Uttar Pradesh. So, sales will also increase in these states. If you are an investor, be wise and think positively and do not act much on this kind of small news. Nothing happened to any company, surely they will find some other way to make profit.

Pinion Spirit does not operate in Bihar, and it's all quarter's results are really good, and also valuation is too good. You can think of it. I am holding good percentage of my portfolio, if it falls I will buy more.

 

Dear Sachin,I mantain in second post also that it is negative and lose of 5% volume and possibilities of ban being followed by other states.So surely ban is negative this negative fact remains,but what to do at the time of negativity of blue chip is entirely different call .So both are complementary.I have always maintained in my thread ,Great time to make fundamentaly strong blue chip portfolio,that if any blue chip has negativity around it and there is possibility of bounce back,that is time to buy blue chips.Nothing wrong in searching some thing positive for future from present negative ..More over when any negative news come ,focus is on negative and after cooling time we always search any Ray of positivity in negative news.Good news and Good price to buy never come together.Bad news and Good price come together..Views present here in this form are always for discussion and are not static but dynamic. Views present here as usual are in no way recommendations.

 

It is also possible that although the government has banned liquor legally, some liquor disciple (follower of madiradevi) or some legal representative of a liquor company may find a loophole in the law and seek the honorable court's help to lift the ban. Courts have to give decision as per law. They cannot consider whether liquor is good or bad for public. This has happened regarding ban on Dance bars in Maharashtra.

 

Its a plain simple political stunt by someone who thinks he is match to our honourable PM

 

Nitish Kumar should have raised taxes on liquor instead of banning it

Check the following link:
https://www.business-standard.com/a...uor-instead-of-banning-it-115112700153_1.html

 

"The complete prohibition is a very sensitive and complex issue. It never succeeded anywhere in the world. Even a liberal country like America had imposed ban on alcohol sale in the early 20th century. After it led to the rise of mafia and bootlegging across America, the US government was forced to reverse the ban."

Excerpted from "https://www.ibnlive.com/news/politi...-politics-of-liquor-ban-in-india-1168995.html"

 

After Bihar, Maharastra is also planning to become liquor free state...exit from liquor stocks....

 

100% Agreed. After Beef Ban and Dance Bar Ban, Liquor Ban is coming.

 

Major Distilleries in Maharashtra are indirectly controlled by politicians. So it is difficult for Maharashtra Govt. to ban liquor. Further, Maharastra Govt. will also have to consider the excise duty loss due to the liquor ban. Already, Maharashtra Govt. is under heavy debt. Can it afford such a huge revenue loss? Ban in some districts is possible. But ban in whole state is difficult.

 

Whether a ban or no ban just see the projected alcohol sales figure for our country it is pegged at 20% cagr growth diageo is no fool to invest such big money grain spirit capacity addition this alone hey many companies like Gulshan polyol associated alcohols Indian glycols ifb Argo sukhjit starch biggies like diageo United all are building capex just look for the suppliers of ENA OR BOTTLERS TO BIGGIES THESE GUYS WILL NOT BE EFFECTED SEE FIE EXAMPLE THE COMPANY ASSOCIATED ALCHOLS THEY ARE PRESENT IN EVERY VERTICAL LIKE RECTIFIRD SPIRIT IMIL IMFL BOTTLING GRAIN SPIRIT SUPPLY THESE TYPE OF COMPANIES WILL SURIVE EVEN A LIQUOR BAN

 

now reccomondation is given by indian hidden gems
Venu GopalNovember 19, 2015 at 8:30 PM
Hi Sir,

What is View on Associate Alcohol and Breweries? From both business and financial perspectives.

Regards,
Venu.

Indian Hidden GemsNovember 22, 2015 at 11:36 AM
Associate Alcohol and Breweries is a buy!!



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