**MARKET BRIEF: Liquor Stocks Hit by Historic India-EU Trade Deal** **Date:** January 27, 2026 **Subject:** Sector Update | Alco-Bev Indian alcohol stocks witnessed sharp selling pressure today following the conclusion of the long-awaited **India-EU Free Trade Agreement (FTA)**. The pact, finalized on Tuesday, drastically slashes import duties on European alcohol, exposing domestic producers to stiff competition from global heavyweights. **Market Reaction: Sea of Red** Domestic liquor majors took an immediate hit as the market digested the steeper-than-expected tariff cuts. * **Sula Vineyards** plunged to an all-time low, trading near **₹190**, down over **3%** intra-day. * **United Spirits (USL)** slipped approximately **1.5%**, while **Radico Khaitan** and **United Breweries** faced similar selling pressure. * Smaller players like **IFB Agro** and **Fratelli Vineyards** saw deeper cuts of roughly **4-5%**. **The Deal: Drastic Duty Reductions** The new agreement aggressively lowers barriers for European brands, far exceeding earlier industry estimates of gradual reduction. * **Wines:** Duties on premium European wines will crash from **150%** to just **20%**. Mid-range wines will see tariffs drop to **30%**. * **Spirits:** Import taxes on Whisky, Vodka, and Gin will be slashed from **150%** to **40%**. * **Beer:** Duties will fall from **110%** to **50%**. **Strategic Impact** While the deal opens EU markets for Indian brands, the immediate sentiment is bearish for domestic premium segments. The massive duty cut allows premium French and Italian wines, as well as Scotch whiskies, to retail at significantly lower prices. This directly threatens the high-margin "premiumization" strategy of companies like Sula and Radico Khaitan, forcing them to compete price-to-price with established global heritage brands. **Timeline** The agreement is expected to be signed later this year and come into force by **early 2027**. Domestic players now face a tight window to adjust pricing and marketing strategies before the floodgates open.