When Indian liquor gives more intoxication than English liquor, then why is there so much difference in the price?

The world of liquor is divided into two parts, desi and English liquor. Interestingly, many people say that the effect of country liquor is stronger than that of English liquor. Despite this, the price of English liquor skyrockets, while the country liquor fits in the pocket of the common man. But this difference is not just a matter of ‘intoxication’ but a game of policies, tax, market and branding.

The first and biggest reason is the huge tax difference. Almost every state considers English liquor as a premium category and imposes several times higher excise duty on it as compared to country liquor.

A major part of the cost of a bottle of English liquor goes in taxes. On the contrary, low tax is imposed on country made liquor, so that it can easily reach low income people.

Liquor prices are reduced because the government knows that this section cannot spend much. Another important aspect is packaging and branding. The entire English liquor market runs on glamour, brand image, marketing and premium quality.

Lakhs and crores of rupees are spent on glass bottles, labels, seals, advertising and promotion. These expenses are further added to the price. Whereas the packaging of country liquor is very simple. In most of the states, it is available in plastic pouches or ordinary bottles, the expenditure on which is almost negligible.

The third reason is the target market. English wine is marketed towards the middle and upper income groups, who are willing to pay higher prices for premium products. Whereas country liquor is mainly for the working class or low income people, hence its price is controlled so that it is easily available.

Now let’s talk about production and supply. An interesting thing is that many indigenous liquor manufacturers provide rectified spirit (base spirit) to the companies that make English liquor. Meaning, the raw materials are often the same, but the processes, filtration, flavoring, aging and quality checks in English wines are much more stringent and expensive. All these processes increase production costs, which are ultimately reflected in the price of the bottle.