Water woes continue to haunt Indian beer industry
Water problems continue to be a major headache for Indian beer producers, especially in the Maharshtrian city of Aurangabad, which is dubbed as Beer Capital of India. Home to almost all of the big beer companies and some of the best brands in the country, thecity of Aurangabad has been facing an acute water problem for the last five months. A deficient monsoon (July- September period) triggered the water scarcity in the region. The water of the Aurangabad regions is considered the best water in India to produce beer.
Popular brands like Kingfisher, Fosters, Heineken and Carlsberg are watching the situation carefully and have made alternate arrangements for water. But if the situation doesn’t improve by March 2013, which is start of the peak production and consumption period, these producers might be forced to cut down their production drastically for their Aurangabad sites. Given the complex taxation system of the country, most of these producers will have to incur losses in the state of Maharashtra (if you get beers from manufacturing units based outside the state, you are taxed more).
The breweries in Aurangabad are located at the industrial area of Walunj and cumulatively produce about 180 million liters of beer. All of these breweries source their water requirements from the nearby Jayakwadi dam. Till last August, Maharashtra Industrial Development Corporation (MIDC) used to draw as much as 55 million litres of water per day (ml/d). Of the total volume, 35 to 40 per cent of water was earlier being given to beer manufacturing units at Aurangabad. With the water levels having depleted markedly, there have been widespread protests by the farmers in the area, over the diversion of dam water for industry use. Consequently, the MIDC has put restrictions on water supply to industrial units, particularly breweries. In a formal request, MIDC has asked all the manufacturing companies, including breweries to reduce water consumption till the situation improves. The corporation, which usually used to lift about 56 ml/d from the dam, currently takes only 44 ml/d of water, a drop of about 25 percent.
In the first week of November, many farmers had even forced the MIDC to shut down the water supply to the industries in the district for one day. Normal water supply could be restored after much haggling and only after police protection was given to the MIDC employees. To add to beer companies woes, local political leaders have threatened to launch a major agitation to force the Maharashtra Government into putting an end to the diversion of water from the Jayakwadi Dam to beer manufacturing units in the region.
As it doesn’t usually rain in the first half of the year in India, it is next to impossible that water level in the dam will reach to the normal mark before June/ July. This has put breweries in the city in a dilemma. Beer companies are trying out alternative arrangements from bore wells and ensuring adequate supply through private water suppliers. But the water quality is not very good, nor is it economical, which has been the constant bane of the beer companies. As summer picks up, the demand for beer will also rise which will result in increased need of water.
