Bubbling with action

The Indian wine industry and its immense growth potential.

Good pickings: Indian wines are grabbing global attention .-

We believe that the Indian palate is becoming more adventurous about wine, and the next two years will see a dramatic rise in the different types of wines produced domestically," says Rajeev Samant, CEO of Sula Vineyards. The company, one of the pioneers in the country's wine industry, opened its first winery in 2000. Today it has more than 300 acres under grape cultivation and sells a variety of wines, including a sparkling wine, a Chenin Blanc, a Cabernet Shiraz, a Sauvignon Blanc and a blush Zinfadel.

India's wine capital

The Indian wine industry is on a high with the market recording a growth of 25 per cent every year. With 19 wineries located in Nashik, the city can easily call itself `India's Wine Capital'. Though it was always known as the `grape city', with the region's soil and climate being congenial for grape cultivation, it was only in the past decade or so that the district has emerged as the country's vineyard. The wineries have played a major role in promoting the wine culture in India and creating a market where there was none. Maharashtra already has over 1,500 acres under grape cultivation for wine production. The main reason for the growth of wine consumption in the domestic market is the growing health consciousness among the Indian middle and upper class. "The domestic alcoholic beverage market has historically been dominated by beer and spirits, but with broadening world views and increasing disposable income levels, a growing number of Indians are turning to wine. The new wine drinkers in the country broadly fall in two categories: first, people who are drinking alcoholic beverages for the first time, and second, people switching over from other drinks to wine. Health is a big factor for people in the second category," says Samant.

There are a lot of whiskey drinkers, who are being advised by their doctors to switch to wine, mainly red wine. New drinkers, in contrast, drink as much (or more) white wine, basically because a lot of these are women who tend to have a natural affinity for white wine .

Immense potential
The potential for wines in India is immense. According to estimates, the per capita consumption of wine in India is about 4.5 ml per year, which is abysmally low compared to France, which consumes 42 litres per person per year, and China, 375 ml per person per year. "Though export constitutes a sizeable chunk of the market, we are focusing on the domestic segment as well," says Vinod Devkar, Manager at ND Wines. The wineries are actively organising wine festivals, wine-tasting sessions and vineyard tours across the country. For instance, ND Wines recently organised a wine festival in Bangalore. The company also plans to organise similar festivals at tier-II cities such as Pune, Bhopal and Jaipur. However, the industry is also facing problems, which might affect its growth potential. "India has started manufacturing wines, but there are no cork manufacturers and we have to import cork for the bottles and the import duty on corks is 40 per cent on invoice value. This increases the price of wines manufactured by us, making it difficult to export," says Devkar. However, the export segment is also recording a dramatic growth with the attitude towards `Made-in-India' wines changing from `OK' to `great'. "The Indian wine has come a long way, and things would only get better. Sula Wines has already started appearing on the list at some of the finest restaurants in France, Sweden Singapore, Italy,

UK, US and Canada. The world is starting to take Indian wine seriously, mainly because it is a great-quality wine that is different, new and affordable," says Samant. ND Wines, on the other hand, exports mainly to Hong Kong and plans to export to Europe as well. The overall turnover of wineries over the last year is estimated around Rs 35 crore. It is not just the Indian wineries that are fast realising the potential of Nashik as a wine-growing region. Seagram, part of the French liquor major Pernod Ricard, also plans to set up a winery at Nashik and Australia's Foster Group also has its wine plans for the region. These are indications that there is no stopping Nashik from representing India on the wine map of the world.

Indian Made Foreign Liquor

Indian made foreign liquor basically prepared from ethyl alcohol of different concentration with added flavour and coloured bottled hygienically. In India there are about 260 units engaged in the

production of alcoholic brandy, whisky, beer & other beverages. The installed capacity of all those units is estimated of the order of 1400 to 1450 million liters per annum. India has been exporting alcohol in a substantial quantities. The estimated growth rate of demand is 20% per annum with increase in population and other industrial growth and consumption. There is good scope for new comers.

Alcoholic Beverages
In India the total alcohol production more than doubled to 800 million liters between 1993 and 1996. The unrecorded consumption was estimated to be more than 1200 liters in India in the recent years. A study carried out in India reported that drinking families from lower income groups spend 15%- 45% of their income on alcohol.

Production Area
Haryana, Punjab, Rajasthan, Uttar Pradesh, Kerela and mostly all Indian metropolises have alcohol industry establishments. The

southern region of India has abundant consumption of alcohol .

Growth Promotional Activities

In earlier years the policy of the Indian government was to discourage the consumption of alcoholic beverages. This even went so far as to involve total prohibition in some states. However, the resulting problems of illicit distillation, the leakage of government excise revenue and government licensing . the problems involved in enforcement, led to a review of this policy. The importation of potable alcohol is subject to government licensing.

Types
Liquor manufactured in India is categorized as beer, country liquor and Indian Made Foreign Liquor (IMFL). IMFL production includes wines, whisky, rum, vodka, gin and brandy. Draught beer has been recently introduced and has done well in the places in which it has been introduced. Canned beer is an even more recently introduced new beverage.

History of Alcohol
Alcoholic beverages date back to the very early part of man's history. Many archaeologists believe that wines made from grapes have existed for more than 10,000 years and that drinks such as mead and beer have existed for even longer. Throughout its history, alcohol has been used socially for many diverse purposes, such as calming feuds, giving courage in battle, sealing pacts, celebrating festivals, and seducing lovers. Historians speculate that prehistoric nomads may have made beer from grain & water before learning to make bread. The Celts, Ancient Greeks, the Norse, Egyptians, and Babylonians all have records of production and consumption of alcoholic drinks. Alcohol was included in the Egyptian burial provisions for the journey to the afterlife. With agriculture came regular and larger supplies of the raw materials required for fermentation and distilling. The first civilizations to form around a fixed agricultural life style are the Sumerians around 4000 b.c. The evidence that alcohol was produced here has been confirmed by archaeological findings and images on many of their cuneiform tablets which show images of alcohol being drunk. A description of the making of beer on an ancient engraving in the Sumerian language followed by a pictograph of bread being baked, crumbled into water to form a mash, and then made into a drink that is recorded as having made people feel "exhilarated, wonderful and blissful."

Civilization continued to flourish and so did alcohol consumption and production .We know that the ancient Egyptians were drinkers, because they invented the first straws ...for drinking beer that still contained wheat-husks. There are also some passages within their texts referring to the social problems associated with drunkenness, and a 1600 BC Egyptian texts contain 100 medical prescriptions calling for the use of alcohol. There is evidence from Babylonian, another of the early cradles of humanity, clay tablets detail recipes for beer, in fact we know that the Babylonians knew how to brew 20 different types of beer. Distilled spirits have their origin in China and India in about 800 BC. Alcoholic drinks such as wine and beer are produced primarily through fermentation of a fruit or grain of some kind. Drinks such as Brandy, Cognac, and Sake are created by distilling these ferments yielding what is often a more potent drink. The distillation process did not make its way to Europe until the eleventh century. When the Greeks and the Romans took up the mantle of being the greatest civilizations on earth, other than wine, the majority of their drink was often flavored with herbals like balsam, dandelion, mint, and wormwood seeds, and even crab claws & oyster shells for flavorings. The Greeks worshipped the god Bacchus, the god of wine. The Romans worshipped the same god under the name of Dionysus. The form of worship usually took the form of an orgy of intoxication, and their literature is full of warnings against intemperance. There is writing, which tells how Caesar toasted his troops after crossing the

Rubicon, which began the Roman Civil War. It was the Roman legions who around 55 BC introduce beer to Northern Europe. The beers and ales of Medieval Europe were actually rich in proteins and carbohydrates, making them a good source of nutrition in that society. It is theorized that hops, which are now a universal ingredient in beer making, date back to Babylonians in the eighth and ninth centuries BC. In Europe hops were primarily medicinal plants which were added to beer to make both the drink and the medication taste better. This process soon became standard in the production of the beverage. Americans during the time of the American Revolution, for the most part showed little concern over drunkenness, and spiritous liquors had become the greatest factors in colonial commerce. The first serious and effective efforts to regulate liquor consumption, particularly within the army, occurred during the war. Following it, social conditions weakened traditional controls over drunkenness and consumption increased even further. The early temperance movement developed among New England Federalists; the most prominent spokesperson was Benjamin Rush, author of Inquiry into the Effects of Ardent Spirits on the Human Mind and Body (1785), who was one of the first to challenge popular beliefs in the health benefit of spirits. He recommended for temperance and health the use of fermented alcoholic beverages rather than spirits. This early movement relied on the technique of persuasion to bring about such temperance. Congressional attempts

to impose a tax on distilled spirits resulted in the Whiskey Rebellion (1794). During this time, the brewing industry was the most prosperous of the beverage alcohol industries. Because of the competitive nature of brewing, the brewers entered the retail business. Americans called retail businesses selling beer and whiskey by the glass saloons. To expand the sale of beer, brewers expanded the number of saloons. Saloons proliferated. It was not uncommon to find one saloon for every 150 or 200 Americans, including those who did not drink. Hardpressed to earn profits, saloonkeepers sometimes introduced vices such as gambling and prostitution into their establishments in an attempt to earn profits. Many Americans considered saloons offensive, noxious institutions. Prohibition had its roots back in the temperance movements of the nineteenth century. The cultural climate in the U.S. at that time was apt to accept such an idea, which was compatible with popular contemporary notions of personal perfection. Prohibition in the United States was a measure designed to reduce drinking by eliminating the businesses that manufactured, distributed, and sold alcoholic beverages. The Eighteenth Amendment to the U.S. Constitution took away license to do business from the brewers, distillers, vintners, and the wholesale and retail sellers of alcoholic beverages . The first prohibition law was passed in Maine in 1851, and some twelve states followed suit. Eighteen years later, the National Prohibition Party was formed, which won its first seat in the House of

Representatives in 1890. Another three years, and the Anti-Saloon League, a powerful political force in later years, was formed. Throughout the second half of the century, various anti-alcohol measures were enforced in states all over the Union. By 1906, the movement was well under way, fueled by anti-alien and anti-Roman Catholic sentiments among the Protestant middle classes. The conflict between rural and urban lifestyles was becoming more apparent with the growth of the cities, which were perceived by country-dwellers as hotbeds of crime and vice. Employers were concerned, as they always had been, about the effects of alcohol on the efficiency of their workforce. These factors, combined with a temporary Wartime Prohibition Act, introduced in World War I to save grain for food, led to total Prohibition in 33 states by 1920. Some prohibition leaders looked forward to an educational campaign that would greatly expand once the drink businesses became illegal, and would eventually, in about thirty years, lead to a sober nation. Other prohibition leaders looked forward to vigorous enforcement of prohibition in order to eliminate supplies of beverage alcohol. After 1920, neither group of leaders was especially successful. The educators never received the support for the campaign that they dreamed about; and the law enforcers were never able to persuade government officials to mount a wholehearted enforcement campaign against illegal suppliers of beverage alcohol.

The laws were enforced easily in rural communities where the population was most sympathetic. But in the cities, an enormous industry grew up around the production, transportation and sale of contraband beer and liquor. The bootleggers (named after the practice adopted by travelers in the Midwest in the 1880's, who concealed liquor in their boots when trading with Indians) began by importing booze over the Mexican and Canadian borders, and from the Caribbean.The damage was not limited to public health. Because of the complexity of the operations, the bootleggers quickly organized themselves into alliances and cartels that could control their activities. Law and order began to break down as corruption spread virus-like into public life. In a famous trial in Indiana in 1923, it was revealed that protection monies were paid to: "the mayor, the sheriff, a judge of the city court, the prosecuting attorney for the county, a former sheriff, a former prosecuting attorney, a deputy sergeant, a justice of the peace, an influential lawyer, and former deputy sheriffs, detectives, policemen, petty lawyers, bartenders, caberet singers and notorious women." In other words, just about everybody. The best evidence available to historians shows that consumption of beverage alcohol declined dramatically under prohibition. In the early 1920s, consumption of beverage alcohol was about thirty per cent of the pre-prohibition level. Consumption grew somewhat in the last years of prohibition, as illegal supplies of liquor increased and as a new generation of Americans disregarded the law and rejected the attitude of self-sacrifice that was part of the bedrock of the prohibition movement.

Conceptual Framework
India is the third largest market for alcoholic beverages in the world, and the domestic market is largely dominated by United Breweries, Mohan Meakins and Radico Khaitan. The demand for beer and spirits is estimated to be around 373 mn cases per year. There are 12 joint venture companies having a licensed capacity of 33,919 kilo-litres p.a. for production of grain based alcoholic beverages. Around 56 units are manufacturing beer under license from the Government of India. The two segments in the liquor segment, country liquor and Indian Made Foreign Liquor, both cater to different sections of society. The former is consumed in rural areas and by lowincome groups, while the latter is consumed by the middle and high income groups. There are approximately 23,000 licensed liquor outlets in India, with another 10,000 outlets in the form of bars and restaurants. Regulations in this sector differ state-wise. In Tamil Nadu, Kerala and Andhra Pradesh, the distribution is controlled by the state government, and any change XVIII in the ruling party has a direct impact on the availability of alcohol. In Uttar Pradesh, liquor distribution licenses were earlier based on bidding, and the highest bidder was given the license. This has not changed to the lottery allotment system. Gujarat Government has banned the sale and distribution of liquor in the state.

The wine industry in India has come into prominence lately and has been receiving support from the Government as well. The market for this industry has been estimated to be growing at around 25% annually. Maharashtra has emerged as an important state for the manufacture of wines. There are more than 35 wineries in Maharashtra, and around 1,500 acres of grapes are under cultivation for wine production in the state. The Maharashtra Government has declared wine-making business as small-scale industry and has also offered excise concessions

Rationale of study:

This study will help the Indian exporters of alcoholic beverages to channel their exports in the potential markets of Russia Uzbekistan and Ukraine. It will also help in adopting right technique for promoting their products and adopting right pricing strategies .

Objective:

The objective of the study is to analyze the exports of Alcoholic Beverages from India to Russia, Ukraine and Uzbekistan and forecast the future export to these countries

Methodology:
(a)The Study:
The study is mainly analytical in nature in which the export potential of Alcoholic beverages from India to Russia Uzbekistan and Ukraine will be analyzed by collecting data from secondary sources in synergy with the objectives.

(b)The Tools:
Data collection:
The primary data collection from overseas customers in form of questionnaire, interviews, and observation are difficult which compel us to collect the data from secondary sources of information like annual reports published on alcoholic beverages export and annual statistics from various websites of government sources.

Data analysis:
The data collected is used to find the export potential of alcoholic beverages in Russia Uzbekistan and Ukraine and will be used to find the trend in export of various alcoholic beverages.

ALCOHOL IN RUSSIA

ABSTRACT

The contribution that alcohol has made to the large fluctuations in mortality in Russia in recent years is now widely recognized. An association between heavy drinking and Russia is part of popular culture. But what is the reality? This paper reviews the evidence on historical patterns of consumption in Russia, highlighting the difficulties of obtaining valid statistics during the Soviet period (1917 1991). It notes how the state, at various times, encouraged alcohol sales. By the early 1980s, the social cost of heavy drinking was becoming apparent. This led, in 1985, to the imposition of the wideranging and initially highly effective anti-alcohol campaign by Mikhail Gorbachev. The features of this campaign and of its subsequent collapse are described. In the 1990s, consumption of alcohol increased rapidly. There has, however, been a recent reduction in alcohol-related deaths. It is concluded that heavy drinking is not an inevitable feature of Russian life and that, as the state has done much to create the present problem, it also has a role to play in resolving it.
INTRODUCTION

There is now compelling evidence that alcohol has been a major factor in recent widespread changes in mortality in Russia and in other countries of the former Soviet Union. In 1985, Mikhail Gorbachev, the newly appointed General Secretary of the Communist

Party of the Soviet Union, instituted a large-scale anti-alcohol campaign. Within a few years, as the Soviet Union was collapsing, the campaign faltered and eventually gave way to a rapid rise in consumption, fuelled by widespread illicit production, on a massive scale. These changes were accompanied by large fluctuations in mortality. Between 1985 and 1986, male life expectancy at birth increased by 2 years and between 1992 and 1993 it fell by 3 years. The change in life expectancy was due, almost entirely, to differences in mortality among the young and middle aged (Leon et al., 1997 ). Changes on this scale are unprecedented anywhere in the world in peacetime (Ryan, 1995 ). We have previously shown that these changes were real rather than due to data artefact, and that alcohol has played a major role, with the largest relative fluctuations from alcohol-related deaths, injuries and cardiovascular diseases, while mortality from cancers remained stable (Leon et al., 1997 ). Subsequently we have also shown how alcohol has contributed to the regional diversity in the decline in life expectancy in the early 1990s (Walberg et al., 1998 ) and to the socio-economic differentials in Russian mortality (Chenet et al., 1998a ). An early challenge was to explain the apparent association between drinking and increased death rates from cardiovascular disease, which is contrary to the view prevailing in the West where alcohol, at least in moderate amounts, is seen as cardio-protective (Renaud et al., 1993 ). It was clear that traditional risk factors could not explain the observation that deaths from cardiovascular disease in Moscow increase significantly at

weekends when binge drinking is most likely to occur (Chenet et al., 1998b ). Subsequently we have shown that binge drinking has effects on the heart which are entirely different to those seen with regular moderate consumption (McKee and Britton, 1998 ) and that the pattern in Russia leads to a greatly increased risk of sudden cardiac death (Britton et al., 1998 ). Collectively, this evidence demonstrates the importance of alcohol in explaining the Russian mortality crisis of the 1980s and 1990s. It is against such a background that this commentary overviews the pattern of drinking in Russia and how it has changed in recent years. It draws on a variety of sources, in particular a review of the antialcohol campaign by White (1996) and a series of studies of drinking in Russia edited by Simpura and Levin (1997). HISTORICAL PATTERNS OF CONSUMPTION Alcohol, as a central component of life in Russia, has been commented on, by Russians and by travellers from other countries, since at least the tenth century AD. There are many accounts of the very high prevalence of drinking to the point of unconsciousness by both men and women, of all social strata, to a level that amazed writers from other European countries. By the nineteenth century, however, when statistics with at least some degree of validity became available, the level of alcohol consumption was actually lower than in many other countries. It has, however, been argued that as Jews and old believers' drank little, those who did drink consumed quantities that were comparable with, for example, France. What differed was

the nature of that consumption. Nearly 90% of all alcohol was in the form of spirits (vodka), a much higher figure than in other countries, and drinking typically was undertaken in binges rather than the manner of consumption in, for example, Mediterranean countries, in which wine was drunk each day with meals. Widespread and excessive alcohol consumption was tolerated, or even encouraged, because of its scope for raising revenue. From the 1540s, Ivan IV began to establish kabaks (where spirits were produced and sold) in all major towns, with revenues going directly to the royal treasury. These gained monopoly status in 1649 and continued, through periods in which they were effectively franchised to local merchants, until the revolution. By the early twentieth century, income from alcohol constituted at least a third of all government revenue. It has also been argued, especially by Marxist historians, that heavy consumption of alcohol was also used as a means of reducing political dissent (White, 1996 ). The first Bolshevik government reduced alcohol production (Sheregi, 1986 ) but by about 1921 consumption had returned to very high levels, in particular spirits distilled illicitly. By 1925, all the restrictions imposed after the revolution were rescinded, after which alcoholrelated deaths exceeded their pre-war level, in some cities, such as Moscow, by as much as 15-fold. This decision, together with that to re-establish a state monopoly, was taken, quite explicitly, by Stalin, to raise money and thus avoid the necessity of seeking foreign investment capital. By the 1970s, receipts from alcohol were again constituting a third of government revenues.

Valid information on levels of consumption is difficult to obtain due to the climate of official secrecy during the Soviet period (Simpura and Levin, 1997 ; Treml, 1997 ). From 1963, figures for sales of alcoholic beverages from state outlets were combined in an other foodstuffs' category, with products such as ice cream, coffee, mushrooms, and spices, thus instantly becoming the largest single category of foodstuff. Other statistics on trade and production slowly disappeared over the following decade. At no time were figures for illegally produced alcohol, or samogon, reported, even though, according to some researchers, this may have accounted for 50% of total consumption. The few examples of family expenditure surveys conducted before the 1980s produced figures for alcohol consumption that are widely disbelieved as they equate to figures substantially lower than even official production levels. Potentially more reliable figures have been generated outside the USSR by, for example, surveys of emigrants, especially to Israel, although these are problematic as there is evidence that Soviet Jews drank rather less than their Slavic neighbours. Nonetheless, one of the most rigorous studies, although again likely to be an underestimate because it did not include that large volume of alcohol now known to be stolen each year, suggests that consumption more than doubled between 1955 and 1979 to 15.2 litres per person (Treml, 1975 ). This figure is higher than that recorded for any OECD country (France was highest at 12.7 litres in 1990, although most other countries were in the range 59 litres), where data are largely derived from validated surveys of consumption (World Drink Trends,

1992 ). Of course, this figure relates to the entire USSR and, for religious and other reasons, there are marked regional variations so levels in the Russian heartland are likely to have been much higher. Other studies of emigr families suggested that alcohol consumption accounted for 1520% of disposable household incomes. Studies by dissidents and others supported the impression that alcohol consumption was increasing at alarming levels, suggesting, for example, that alcohol accounted for 15% of total retail trade (Krasikov, 1981 ). Under Gorbachev, official statistics on a wide variety of topics slowly reappeared, although it was still not possible to undertake or publish research on topics such as alcoholism and social breakdown (Korolenko et al., 1994 ). The available data included figures on official production of absolute alcohol equivalent which was reported to have increased from 2.2 litres per capita in 1940 to 7.2 in 1985, a rather greater increase than had been assumed in the earlier estimates by Western observers. However, the level of consumption is only one part of the picture. It is also important to know whether the frequency of drinking and the social context within which it takes place are different from those in other countries. Here, the information is even more fragmentary. Various reports suggest that, by the 1980s, the age at which people began to drink had fallen, that increasing numbers of women and children were heavy drinkers, and in some cities the average consumption among working adults was a bottle of vodka each day (White, 1996 ).

This pattern is reflected in the extensive evidence, reviewed by White (1996), from newspapers and from local surveys that alcohol consumption was becoming a major social problem. This included reports from a chemical plant that 3.5% of the workforce were confirmed alcoholics, 2.2% showed early signs of addiction, and a further 18.8% were alcohol abusers, with only 1.4% abstainers. Between 75% and 90% of absences from work were attributed to alcohol. It was suggested that loss of productivity associated with alcohol was the main reason for the failure to achieve the Soviet Union's 5-year plan in the early 1980s, with estimates that the loss of productiv-ity due to alcohol was up to 20%. There were many letters to newspapers complaining of a lack of government action to tackle excessive consumption. In summary, despite the absence of definitive information on patterns of alcohol use in Russia before 1985, there is considerable evidence from many sources that alcohol was producing wide-ranging and substantial social problems. Furthermore, the commonest type of alcohol consumed was vodka and it appears that much drinking was in binges. Consequently, there was substantial scope for reduction when the campaign began in 1985.
POLICY ON ALCOHOL IN THE 1980s

Although there had been a series of campaigns against alcoholism under Brezhnev, there was little evidence that they had much effect. Indeed, Brezhnev was known to be a very heavy drinker. After 1982, action was initiated under Andropov and Chernenko under the

general heading of reducing anti-social behaviour. In a speech in 1984, Chernenko finally focused national attention on the problems of alcohol abuse, encouraging more rigorous enforcement of existing legislation. An anti-alcohol movement was already emerging in the early 1980s and, supported by the message from Chernenko, there was some evidence that both alcohol consumption and alcoholrelated crimes were falling by 1984. In early 1985, Gorbachev succeeded Chernenko, who is believed to have died from cirrhosis. The campaign, although identified by many commentators with Mikhail Gorbachev, is now thought to have owed rather more to others. His wife, Raisa, who had direct experience of the effects of alcoholism in her family, may have played a major part, but the prime movers are now known to have been two members of the Politburo, Yegor Ligachev and Michael Solomentsev (White, 1996 ; Service, 1997 ). They were able to gain acceptance of the policy despite opposition from many other senior politicians. Gorbachev has also suggested that his daughter, Irina Mikhailovna Virginskaya who is a medical doctor, played an important role in convincing him (Gorbachev, 1996 ). Gorbachev launched the anti-alcohol campaign in May 1985 (Ivanets and Lukomskaya, 1990 ; Tarchys, 1993 ; White, 1996 ). All organs of the state were exhorted to develop strategies to reduce alcohol consumption. One of the most visible manifestations of this, to foreigners, was that alcohol was banned at official functions, but also party officials and managers who drank heavily were to be dismissed, outlets were to be reduced radically, and many other actions were to

be taken by, for example, trade unions and the media. In particular, an attempt to mobilize society in the campaign for temperance led to the creation of the All-Union Voluntary Society for the Struggle for Sobriety in September 1985. This society claimed 12 million members after 1 year. Several points about the campaign should be noted. The May launch was an advance announcement of future action. The first rules restricting access to alcohol came into effect on 1 June 1985. These were important, as they included a series of actions that could be enforced at once and where the impact of enforcement was highly visible, such as banning drinking of alcohol at all workplaces, including formerly legal bars, such as those in higher education establishments; banning sales before 2 p.m.; restricting alcohol sales to off-licences; and banning sales on trains (including dining-cars) and similar establishments. In August 1985 prices increased by 25%, with another increase in August 1986. Subsequently there was a series of further measures to restrict access, with cuts in production leading to massive shortages. The consequences of these changes were immediately apparent, such as the evidence of long queues at official alcohol outlets (up to 3000 people in one case in Moscow), but to assess whether alcohol consumption really fell, it is necessary to ask whether there is any evidence of a corresponding change in other related measures. Obviously, official statistics must be treated with some caution, not least because it is likely that some officials may have felt it necessary

to forward data suggesting that they were achieving better results than was actually the case. With this caveat, official figures indicated a fall of a third in production of spirits. There is, however, extensive supporting evidence from other sectors. There were recorded falls of similar magnitude in road traffic accidents and absenteeism from work. Several surveys indicated that about 10% of people had given up drinking and about a third were drinking less. There were also many press reports suggesting that, in some areas, there had been dramatic reductions in consumption, although there were other reports of areas where little had changed, and there was evidence that many members of the All-Union Voluntary Society for the Struggle for Sobriety had a rather liberal interpretation of abstinence (an analogy was drawn with the Lifesaving Association, membership of which was almost universal in some areas although typically half of its members could not swim). But perhaps the most convincing evidence of its effectiveness was what ultimately led to its demise, its impact on public finances. The figures published at that time for spending on alcohol from official outlets fell in 1985 by 5 billion roubles from that in 1984 (note that the campaign only began in May 1985, so this is consistent with other evidence that consumption was falling before the campaign began), but by 1986 it had fallen further, by 15.8 billion roubles and by 1987 by a further 16.3 billion. The consequences for government revenues, together with the loss of power by Ligachev and Solomentsev, who had played an important part in the genesis of the campaign, are thought to have played a major part in its abandonment in 1988.

The effect of the campaign was short-lived, because of the rapid substitution of illicit production. A number of factors worked in parallel to encourage increased illegal production and trade. One was a visible loosening of restrictions in society generally (glasnost) which led people to be less fearful about minor lawbreaking, reflected in declining prosecution for violating anti-alcohol laws. Many of these were for driving while intoxicated, but most were for home-brewing without intent to sell. From the inception of the campaign, first-time convictions for home-brewing generally led to a light fine or a warning, but in June 1987 this was made a non-criminal offence. Direct evidence on illicit production is less easy to obtain. As noted earlier, official data from Goskomstat in the 1980s used methods that were classified at the time as state secrets' but are now known to have used the simple method of assuming that all sugar consumed in excess of 24 kg per person per year went into samogon, and that 75% of samogon came from sugar. This method broke down and was abandoned after 1988 during an acute sugar shortage. Nemstov (1992) has constructed a series of estimates of overall consumption that are thought likely to reflect at least the true situation. His estimates are based on the proportion of those dying from violence (accidents, suicides, murders) who were found to be intoxicated at the time of death. This is assumed to be closely (and linearly) correlated with actual alcohol consumption per capita. The data on which this is based were acquired from surveys of oblast (regional) health authorities in 1991, and again in 1994. After a complex series of deductions and assumptions, the resulting figures are anchored to

alcohol consumption per capita, as the relationship is known with a reported high level of certainty for Moscow for 1984 and 1986. There appears to have been a short-term absolute decrease in consumption in 1985, but the level began to recover within a year and had returned to previous levels by the early 1990s. Nemtsov's data are more consistent with other evidence than are the official Goskomstat figures, as they show alcohol consumption already falling in 1984. Further supportive evidence of the weakening of the campaign comes from data on crimes committed while intoxicated. These show that the percentage of those sentenced for crimes while intoxicated was steadily rising. There is a wealth of other supporting evidence, reviewed by White (1996), on illicit production, ranging from information on sales of sugar, yeast, and alcohol substitutes such as window-cleaning fluids, to seizures of stills or illicit alcohol, and even reports of theft of alcohol from the de-icing systems of aircraft. Of great importance was the impetus that this dramatic increase in illicit production had for longterm consumption trends. Prior to 1985, most illicit production had taken place in rural areas, where it was frequently used as a form of unofficial currency for use in the informal economy. The 1985 campaign led to a dramatic extension of production into nontraditional settings, ranging from apartments in the industrial cities of the Urals to schools and even long-distance trains.

CURRENT LEVELS OF CONSUMPTION

By the 1990s, there was some evidence that alcohol consumption exceeded the level prior to 1985. The vast expansion of illicit production in the late 1980s has made official production figures even less valid but there is now emerging evidence from household surveys of the scale of alcohol consumption. The Russian Longitudinal Monitoring Survey, undertaken regularly since 1992, contains data on between 10 and 12 thousand people (Zohoori, 1996 ). In the round undertaken in 1995, 7080% of males aged 2055 years and 5060% of females aged 2050 years drank regularly, with 510% in all age groups drinking the equivalent of over 100 g per day. It seems reasonable to assume that some of those who drank most heavily were less likely to be included in the survey, so these figures may have been underestimates. Further data are available from the Russian Barometer survey, undertaken by the Russian Centre for Public Opinion Research between 25 July and 2 August 1996 (Rose, 1996 ). This was a multistage stratified sample of the Russian Federation. We have used these data to examine the determinants of consumption in Russia and, importantly, to highlight the problems of using aggregate data (Bobak et al., 1999 ). Nine per cent of men and 35% of women reported not drinking alcohol at all. Only 10% of men and 2% of women reported drinking several times per week, but 31% of men and 3% of women would drink at least 25 cl of vodka at one go at least once a month, and 11% of men and 1% of women would drink at least 50 cl of vodka in one session at least once per month. There were large geographical differences, with lowest rates of heavy

drinking in the Volga and Caucasus regions and highest in the Urals. Among men, the unmarried drank more than the married, and the widowed drank less. Unemployment was strongly associated with heavy drinking. These findings were consistent with our work on gender and socio-economic differences in alcohol-related death in Russia (Chenet et al., 1998a ).
GENERAL CONCLUSIONS AND COMMENTS

Heavy drinking has a long tradition in Russia. This has led many commentators to argue that it is so ingrained as to be impossible to tackle. Certainly, the pattern of drinking observed in Russia is common to many societies in the far north, such as the Finns and the North American Inuit. However, as the historical evidence reveals, to a considerable extent this culture has been created by successive governments, whether Czarist or Communist. Furthermore, there are considerable variations in the drinking culture within Russia, whether considered in terms of geography, gender, or socio-economic strata, with significant numbers of abstainers among some groups. These findings, together with the large fluctuations in alcohol-related mortality in the 1980s and 1990s, suggest that heavy drinking is not an inevitable feature of being Russian. The history of alcohol consumption in Russia shows that, at various times, the state has contributed substantially to the problem, through the production and distribution of cheap alcohol. Theoretically, it should also be possible for the government to take appropriate action.

In the space available it is not possible to explore the reasons for the failure to develop an effective policy response. Elsewhere, we have examined the inability to mount an effective response to the high level of alcohol-related problems in Hungary and many of the same reasons apply to Russia (Varvasovszky and McKee, 1998 ). It is, however, important to note that these reasons, including corruption and lack of technical and policy-making capacity, lack of ownership of policies, and absence of the levers necessary to co-ordinate the required inter-sectoral action are not confined to policy on alcohol and have implications for health policy more generally (ECOHOST, 1998 ). Fortunately, by the end of 1995, alcohol-related mortality was beginning to decline once more (McKee et al., 1998 ), possibly due to an increase in the relative price of alcohol coupled with reduced access to sales outlets (Simpura and Levin, 1997 ), although evidence of the effects of the economic crisis in the summer of 1998 are not yet available. Notwithstanding this favourable trend, there is clearly an urgent need to put in place the structures that would permit a co-ordinated policy response to the situation in which a considerable number of Russians frequently drink up to half a bottle of vodka at a time.

Alcohol In Ukraine

In 2005, alcoholic drinks in Ukraine benefited from further growth in consumer incomes. Considering the current low per capita consumption of alcoholic drinks compared to Western European countries, volume sales grew. In addition, vodka underwent further de-shadowing with legal production and import volumes growing significantly. As a result, sales of alcoholic drinks are expected to grow by 9% in volume and 11% in current value terms in 2005. A characteristic feature of the Ukrainian market is the high popularity of low alcohol drinks, namely beer, FABs and wine. These products were the most dynamic at the end of the review period.

Beer appeals to the youth

Beer was the fastest growing alcoholic drink in volume terms in 2005, boosted by its increasing popularity with young Ukrainians. The slowdown in FABs created favourable conditions for beer since it is perceived more natural than its low-alcohol counterpart. Domestic beer dominates the market with imported products remaining insignificant in terms of the whole country. Multinationals InBev and BBH established local production in Ukraine which further strengthened their positions and as a result imported beer varieties had to face fierce competition. Lager is the most common beer in the country and accounted for the bulk of sales in 2005. Non-/low-alcohol

beer saw an upsurge in sales driven by its popularity among consumers concerned about their alcohol intake.

"Exotic" spirits too intimidating for mass consumption

Whilst locally-produced spirits increasingly targeted foreign markets at the end of the review period, there was a constant inflow of imported spirits into Ukraine. These were mainly alcoholic drinks not produced in the country, namely whisk(e)y, gin, cognac, tequila and cream-based liqueurs. Being strongly underdeveloped in terms of per capita consumption, such drinks demonstrated healthy growth rates in 2005 underpinned by growing consumer incomes and more Ukrainians frequenting on-trade establishments. However, sales of such spirits are concentrated in the cities, supermarkets and upmarket on-trade outlets in particular. With mass consumers, the products remain luxuries due to their still high prices relative to low consumer incomes at the end of the review period.

Market concentration continues with black market and parallel sales diminishing
In 2005 alcoholic drinks in Ukraine was represented by a number of local manufactures as well as multinational players. The market tends to further marginalise with sales concentration in the hands of the leading manufacturers which eventually squeezed the share of others throughout the majority of alcoholic drinks. At the same time, the share of the black or "shadow" market strongly fell in 2005 due to the efficient measures taken by the government to prevent the illegal production and importation of alcohol beverages. As a result, the rules of the game become more transparent for the manufacturers, especially given the industrys high competitiveness. According to industry experts, black market sales in the Ukraine will experience a further quick fall in the short term.

Forecasts promising given current low par capita consumption in Ukraine

Alcoholic drinks is one of Ukraines industries with bright prospects over the forecast period given the ongoing demand for such beverages combined with the current low per capita consumption. Since combating poverty is a priority task for the government, rising consumer incomes and improving living standards will be beneficial for alcohol drinks. People will tend to spend more time socialising, and going to on-trade establishments will also become more

common. Therefore, there are good prospects for alcohol drinks, the consumption of which was still very low in Ukraine in 2005. Expensive spirits will be afforded not only by well-off consumers, but also by the masses. Improving distribution systems with fewer wholesalers involved will promote wider store coverage and more affordable unit prices.

BEER IN UKRAINE:

Premium lager increasingly favoured sales the most dynamic

In Ukraine, the highest demand is for medium-priced beer which accounted for the highest share of volume sales in 2005. Standard lager reached sales of 911 million litres, worth around Hr4.6 billion. Standard lager is the most developed with a wide variety of brands available. In 2005 sales grew quite dynamically, up by almost 14% and 15% in volume and current value terms respectively. Slight unit price increases were made due to higher transportation costs because of increased fuel prices as well as because of a shortage of ingredients. However, the strongest growth was posted by premium lager, up by 15% in volume terms in 2005, to 174 million litres, worth Hr1.2 billion. Value growth was even healthier, at 18% in current terms. Growing

consumer incomes and Ukrainians desire for high-quality products were behind this good performance in spite of a significant share of consumers remaining price-sensitive. It is typical of premium beer to be bottled in glass although canned options are common here as well (for both local and imported products). The slowest growing was economy lager, with sales rising by 9% in volume with 10% in current value terms in 2005. However, despite its declining popularity, economy beers share remains significant in Ukraine. Economy lager sales totalled Hr1.2 billion and 341 million litres in 2005. Despite the shift to upper-end products, price-sensitive consumers still consider price a priority factor in the purchase decision.

Modern economic POTENTIAL OF UKRAINE

Alcoholic beverage industry

The State Concern of the Alcohol and Alcoholic Beverage Industry (Ukrspirt Concern) consists of Ukrainian alcohol and alcoholic beverage industry companies. There is a state monopoly on alcohol spirits production in Ukraine. Licenses for alcohol production were granted to 82 state alcohol plants, including 74 companies in Ukrspirt Concern, 5 enterprises subordinate to the Sumy regional state administration (Dubovyazovskiy, Novosukhanovskiy, Popovskiy, Stetskovskiy, and Naumovskiy alcohol plants), 1 enterprise subordinate to the State Administration Office (Chortkivskiy alcohol plant), and two enterprises subordinate to the State Committee for the Medical and Biological Industry (Ladyzhinskiy and Mezhirechenskiy alcohol plants). These companies have significantly increased the production of ethyl alcohol over the last several years. More than half of the manufactured alcohol was exported. Meanwhile, existing capacities of alcohol plants are more than 50% idle at present. In the opinion of experts, existing excessive capacities is one of the reasons for the illegal production of vodka. To strike this phenomenon at the root, the decision was taken in 2003 to produce a high-octane oxygen petrol agent at some alcohol plants. Thus, Ukraine can export rectified molasses high purity ethyl alcohol, grain rectified high purity ethyl alcohol, extra-rectified ethyl alcohol, lux-rectified ethyl alcohol, industrial ethyl alcohol with denatured agents, and high-octane oxygen petrol agent (fuel ethanol). Approximately 400 business entities have been granted licenses to manufacture alcoholic drinks. At the same time, about 900 business entities have wholesale rights to trade in liquor and approximately 150-200 ths. business entities are empowered for retail trade.

Alcohol Industry of Uzbekistan

Uzbekistan, with a population of approximately 26.9 million, is the most populous Central Asian 12 Approximately 56% of the population is under 25 years of age. Following the collapse of the country.Soviet Union in August 1991, Uzbekistan emerged as an independent country. Located on the Great Silk Road between Europe and Asia, it once flourished as a trade and cultural center. Merchants from different parts of the world gathered in the ancient cities of Samarkand and Bukhara to admire the 4 majestic architecture of mosques, blue-tiled domes and mausoleums.

Since independence, many Uzbek families have fallen into poverty and some live on less than a dollar a 5. The people of Uzbekistan suffer from high rates of iodine deficiency, iron-deficiency anemia and day.6 vitamin A deficiency Uzbeks are attempting to strengthen the local economy and improve health problems caused by water 7 However, human rights reports indicate a poor human rights record, widespread poverty, pollution 8 repression of religious minorities, torture and escalating violence. Human Rights Watch has criticized the restrictions on political and civil liberties imposed under the authoritarian regime of President Islam.

Criticism focuses mainly on the events of May 2005, where violence erupted between Uzbek security forces and protesters. The protesters were demanding that 23 businessmen who were accused of religious extremism be granted fair hearings. Various human rights groups estimate that several hundred civilians were killed. However, the Uzbek Government has refused an independent probe into the

Market led by beer and vodka

Beer and vodka are the leading products in alcoholic drinks in Uzbekistan. Several joint ventures opened at the end of the last century, which impacted positively on the growth of alcoholic drinks by increasing the consumption of newly launched brands. This trend is especially prevalent among young consumers in urban areas. Beer consumption in Uzbekistan only began to take off during the review period, and there is plenty of room for growth. Vodka remains the most popular alcoholic drink in Uzbekistan, taking over from beer as market leader during the cold season.

Strong influence of local traditions

Uzbekistani consumers are quite conscious of their public image, and their choice of alcoholic drinks is strongly influenced by word-ofmouth communication and the perceived brand value. The majority of Uzbekistan' s population are Muslims who do not drink alcohol; therefore there are a great number of abstainers in the country,

especially among women. Community opinion and tradition play major roles in defining the habits of consumption of alcoholic drinks .

Contraband, parallel, black and grey markets still powerful

Large amounts of alcoholic drinks are smuggled into Uzbekistan from neighbouring countries. The large share of counterfeit alcoholic drinks results in frequent poisonings, as well as a decrease in the overall quality of products sold. Due to the majority of the population being of low-income, the practice of purchasing cheap alcoholic drinks from parallel and black markets is rife.

Market calling for investment

Uzbekistan is still a relatively young, emerging country that offers numerous investment opportunities, and although there was investment in brewing and distilling during the review period, there is still a need to improve the choice and quality of products in the market. A number of Russian investors operate in alcoholic drinks, and there are favourable conditions for those that do decide to invest.

Total Exports of Alcoholic Beverages to Russia from India:-

Year 2000 2001 2002 2003 2004

Exports in ( million liters )

376 877 1579 1642 2651

Total Export of Alcoholic Beverages to Ukraine from India:-

Year 2000 2001 2002 2003 2004

Exports in ( million liters ) 253 526 591 677 641

Total Exports of Alcoholic Beverages to Uzbekistan from India:-

Year 2000 2001 2002 2003 2004

Exports in ( million liters )

137 269 327 375 429

TREND ANALYSIS
Total Export of Alcoholic Beverages to Russia from India
(in million liters)

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Quantity 376 877 1579 1642 2651 . . . . . .

Trend Value 352 445 538 630 723 816 908 1001 1094 1186 1279

Russia
6000

5000

in million liters

4000

3000

2000

1000 0
00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20

Observed Linear

Year

Total Export of Alcoholic Beverages to Ukraine from India

(in million liters) Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Quantity 253 526 591 677 641 . . . . . . Trend Value 352 445 538 630 723 816 908 1001 1094 1186 1279

Ukraine
1400

1200

1000

in million liters

800

600

400 200
10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20

Observed Linear

Year

Total Export of Alcoholic Beverages to Uzbekistan from India

(in million liters) Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Quantity 137 269 327 375 429 . . . . . . Trend Value 169 238 307 376 445 514 583 652 721 790 859

Uzbekistan
1000

800

in million liters

600

400

200 Observed 0
00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20

Linear

Year

RESULTS:The data available for the past five years for the exports of Alcoholic Beverages to Russia , Ukraine and Uzbekistan from India is being analyzed by applying trend analysis and is found that graph is moving in the upward direction since 2001-2002 but had a downfall in around 2003 due the alcohol import policies of these countries . Imports were banned for some time due to high morality rate in these countries and due to the increasing crime and diseases in these countries. And therefore the exports were less in 2003.But when these policies were changed exports have been gone Upwards since 2004 and its still growing. According to the trend, the export potential of Alcoholic Beverages it will be increasing in the next five years. The value will also increase and simultaneously and will highly contribute in the Export of Alcoholic Beverages Sector. As now the policies have been changed there are now more opportunities existing for the export of Alcoholic Beverages to Russia, Ukraine and Uzbekistan.

DISCUSSION:The results which are being obtained by analyzing the data with the help of trend analysis which has shown that there is a lot of potential in exporting of Alcoholic Beverages from India to Russia, Ukraine and Uzbekistan. As this is now one of the major emerging market and has a high demand in these countries as they are very close to North Pole and have winter for 12 months. The temperature goes down to very low around (-4) degrees. So it requires the people living there to take something which can keep them warm in such adverse temperatures. And Alcohol suits best for the situation and it has made the demand of Alcohol rise increasingly in these countries. The export from India is increasing at the fast rate and is also contributing a good share in the Alcoholic Beverage sector which is contributing to the GDP of India. And therefore more stress is given on the export promotion measures to boost the exports from the country. India is a developing country and also a member of World Trade Organization, therefore maintains benchmark in the entire product category which are exported to different countries which includes Alcohol and Alcoholic Beverages. Hence the discussion and trend has shown that there is ultimate growth in this sector.

Implication of the Study

The study will help all the individuals who are associated with the Alcoholic and Alcoholic Beverages Sector In India. This research project aims to help to get them the total information of the coming trend and present situation of Alcoholic Beverage Sector of Russia, Ukraine and Uzbekistan.

1: For Alcoholic Beverages Manufacturer:The study will help them to find out the potential of Indian Alcoholic Beverage Industry. The research study helps in analyzing the current situation of Indian Alcohol Industry and Industries associated with it like the Alcoholic Beverages Industries.

2: For Researchers:The study being based on secondary data available through Internet, Newspapers, Journals, Magazines, Government Websites etc. highlights the areas where researchers can carry out further studies to understand Indian Alcoholic Beverage Industry.

3: For Government:-

The study has generated useful suggestions for the government. If the government implements the suggestions generated on the basis of study. It will help to promote Indian Alcohol Beverage Industry.

Suggestions
1. Approach to International market should be different from domestic market.

2. High quality beverages should be introduced by major companies to increase there sales. 3. Cost effective practices should be practiced. 4. Government should review its policies and more incentives should be provided to Exporters of Alcoholic Beverages. 5. Proper transportation facilities should be provided to decrease cost of transportation. 6. More flavors of Alcoholic Beverages should be launched to capture the concerned market. 7. As Beer and Vodka are the main market leaders, more attention should be given on the production and exports of the same.

Conclusion
After analyzing the past 5 years data using trend analysis and predicting future data, a growth can be seen in the exports of Alcoholic Beverages from India to Russia, Ukraine and Uzbekistan. If exporters follow the norms and standards placed by World Trade Organization, then for sure there will be a high growth and India will be able to export more Alcoholic beverages to Russia, Ukraine and

Uzbekistan as well as many other countries. As Russia, Ukraine and Uzbekistan import a large quantity of pigs from many countries India also contributes amongst the major share and need to increase it more as more potential is there in these above stated markets.

Summary

Chapter 1:
First chapter includes the growth of Alcoholic Beverage sector in India. Alcoholic Beverage sector plays a critical role in the welfare of Indias Exports of Beverages. The income from exports contribute to Indias Gross Domestic Product. This sector is emerging as an important growth leverage of the Indian Economy. The overall turnover of wineries over the last year is estimated around Rs 35 crore. The installed capacity of all units is estimated of the order of 1400 to 1450 million liters per annum. India has been exporting alcohol in substantial quantities. The estimated growth rate of demand is 20% per annum with increase in population and other industrial growth and consumption. There is good scope for new comers.

Chapter 2:
The study on exports of Alcoholic Beverages is based on secondary data which is being collected from various sources like Internet, Trade Journals etc. In this the data for past five years have been collected and then is being analyzed using trend analysis on the available data. After observing the trend it has been found that there is a great potential in exports of Alcoholic Beverages in next five

years and a growth is also there which is bringing higher revenues and contributing in the GDP of the country. Trend is showing the upward direction and also the value is increasing and ultimately resulting in the exports of Alcoholic Beverages to Russia, Ukraine and Uzbekistan.

Chapter 3:
According to the trend the export potential of Alcoholic Beverages will be increasing in the next five years with a rate of 20% per annum. The value will also increase simultaneously and will highly contribute in the Alcoholic Beverage Sector.

Chapter 4:

India maintains bilateral relationship with Russia, Ukraine and Uzbekistan. India is a developing country and also a member of World Trade Organization, therefore maintains benchmark in the entire product category which are exported to different countries which includes Alcohol and Alcoholic Beverages. Hence the discussion and trend has shown that there is ultimate growth in this sector. The exports from India is increasing at the fast rate and is also contributing a good share in the Alcoholic Beverage sector which is contributing to the GDP of India.

Chapter 5:
This chapter gives suggestions and conclusions made after doing a detailed research of the Alcohol industry.

Chapter 6:
This chapter gives the implications to various expected users of this research and the way in which this could be helpful to them.