🥃 India’s Growing Taste for Intoxicants — What It Means for Businesses

A decade ago, a rural Indian household spent about ₹46 per month on alcohol or tobacco. Today, that number is ₹143. In cities, spending has jumped from ₹42 to ₹157. What’s striking? This growth comes despite higher taxes — the textbook strategy to reduce harmful consumption. Instead of cutting back, Indians are buying more. Economists call alcohol and tobacco “demerit goods” — products that bring personal pleasure but create social costs, like second-hand smoke or public healthcare burdens. Governments tax them heavily to discourage usage, while raising funds for welfare programs. Yet, rural households now spend 3.79% of their budgets on intoxicants (up from 2.87%), and urban households spend 2.43% (up from 1.90%). The demand curve hasn’t just bent — it’s flexing its muscles. Why? Rising disposable incomes mean taxes haven’t pinched wallets enough. Changing lifestyles and social acceptance are boosting consumption. Premiumisation — especially in alcohol — is shifting customers towards higher-margin, branded products. 📈 Stocks that could benefit (for learning, not tips): In the Indian market, think of companies with: Strong alcoholic beverage brands (e.g., United Spirits

, Radico Khaitan ) Market leadership in tobacco (e.g., ITC ) Expanding premium product portfolios and distribution networks For policymakers, this trend is a challenge. For certain companies, it’s an opportunity. And for investors, it’s a reminder — human behaviour doesn’t always follow economic theory. Despite higher taxes, Indian spending on alcohol and tobacco is surging, creating growth opportunities for certain consumer and FMCG companies.