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Young Indians Say Cheers to White Spirits

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"The vodka is still made from pure grain. It is triple distilled and charcoal filtered for retaining its purity. As a neutral spirit, its clean taste leaves no after-taste but a pleasant sensation," Kapur pointed out at a preview of the product.

Among white spirits, the vodka category has been outperforming the others in terms of market growth, which stood at 2.8 million cases with a CAGR (cumulative average growth rate) of 47 percent during 2002-06.

"Thanks to a booming economy, young Indians are getting connected to global trends and are looking for new experiences. In fact, the premium segment offers huge potential for distinct brands like Eristoff," Kapur noted.

With the premium vodka growing at 20 percent and accounting for 25 percent of the spirits market, Bacardi plans to produce 400,000 cases per month at its plant, which has a total production capacity of one-million cases a year.

As a favourite drink among young adult Europeans, Eristoff is widely consumed in Austria, Belgium, Chile, France, Portugal and Spain. It continues to gain acceptance as a growing brand even in a price competitive set-up.

"High tariffs and other barriers also deter white spirits from reaching out to discerning drinkers. With import duties, excise and local taxes ranging between 200-450 percent, the vodka retail price is prohibitive. As a result, the grey market continues to thrive and deprive the exchequer of billions of rupees," Kapur said.

If tariffs are lowered, Bacardi plans to bring Grey Goose super premium vodka into the country, besides Martini and Rossi vermouths. To comply with a WTO ruling, the central government plans to lower the taxes, which are still a whopping 550 percent on spirits and wines.

Commerce secretary G.K. Pillai was quoted as saying in the media recently that the duty structure was in the process of realigning to WTO ru
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