Alcohol consumption in Nepal is increasing with a growing acceptance of a drinking culture across all strata of Nepali society. Modernisation, exposure to western culture and remittance-propelled prosperity are considered as the main reasons behind this. As the alcohol industry in Nepal is still at a developing stage, domestic production is not sufficient to meet the demand. Similarly, brand sensitivity is another factor for the import of alcoholic products which has significantly increased over the years. Moreover, the Nepali alcohol industry itself is heavily dependent on imported raw materials. Basically, Nepali alcohol manufacturers are blenders or bottlers. They import alcohol (like whiskeys from countries such as UK) and blend it in their factories to make the final product.

As a result, the average annual growth rate of the import of alcoholic drinks (beer, wine, spirit and raw material thereof) has reached about 16 percent in the last 12 years. This is impressive when compared to the global import of alcoholic products which grew by a mere 4 percent during the same period.

The import figures published by Trade and Export Promotion Centre (TEPC) indicate that there is huge potential in the alcohol industry in Nepal. The potential is not limited to setting up of factories to make beverages similar to imported drinks, but also in developing Nepali indigenous alcoholic products as well.

In fact, Nepal has the potential to develop its own indigenous alcohol technology and export alcoholic products, instead of only importing. Examples of Sake from Japan, Moutai from China and Feni from India’s Goa can provide some ideas on how to develop traditional alcoholic drinks so that they can find an international market too.

However, there is a strong so-called anti-alcohol lobby which is suppressing the market of alcoholic drinks made out of indigenous technology but supporting the alcohol industry that is dependent almost entirely on imports. But this situation looks to gradually change as some political leaders of strong influence are openly demanding support for the indigenous alcoholic products. As these technologies are mainly used by certain ethnic groups and the political leaders who support this industry are from those ethnicities, there is hope that indigenous alcohol production will gather momentum gradually enabling investors to take the first mover’s advantage.