Shares of major domestic liquor companies declined up to 5.89 per cent on the NSE on February 17. The stocks fell after the government slashed tariffs on the import of bourbon whiskey from the US.
Shares of key domestic liquor makers such as United Spirits Ltd fell 1.93 per cent to hit an intraday low of Rs 1338 apiece. United Breweries shares fell 2.03 per cent to trade at an intraday low of Rs 1999.05 apiece and Radico Khaitan’s stock fell 5.89 per cent to trade at an intraday low of Rs 1,922.4 apiece. BSE-listed Piccadily Agro Industries Ltd stock also declined nearly 5 per cent to hit an intraday low of Rs 558.25 apiece.
The new tariffs include the imposition of a basic customs duty of 50 per cent on bourbon, along with an additional 50 per cent levy, making the total tariff 100 per cent. Notably, the current levies are lower than the previous 150 per cent. The US had “welcomed” the initial set of tariff cuts, and both countries announced plans for a trade deal.
The tariff cut was followed by U.S. President Donald Trump’s critique of “unfair” levies in the South Asian market. Following the development, the prices of bourbon whiskey imported from the US are expected to decline significantly. A decline in the cost of imported bourbon is likely to create stiff competition for similar products sold by domestic liquor brands. Notably, one-fourth of all bourbon whiskey imported into India comes from the US, making the US the main exporter of this alcoholic beverage.
“India has been just about the highest tariff nation in the world...hard to sell to India because of very strong tariffs...whatever India charges, we charge them,” Trump said.
Earlier on February 13, Prime Minister Modi met US President Donald Trump at the White House. Prior to the meeting the US President announced that he will impose reciprocal tariffs on various trade partners of the US.
At the time of writing this story, shares of United Breweries traded at Rs 2,025.6 apiece down by 0.74 per cent on the NSE. Shares of United Spirits traded lower at Rs 1,344.55 apiece down by 1.45 per cent. Radico Khaitan’s stock traded deeper in the red as it traded lower by 6.35 per cent at Rs 1,913.15 apiece.
