Beer enthusiasts in Karnataka are bracing for a price hike as the state government has issued a final notification increasing excise duty on beer. The new rates, announced on Wednesday, will take effect from January 20, 2025, and are expected to raise the retail prices of premium beer by Rs 10 to Rs 50, depending on the brand.
Under the revised excise structure, beer with an alcohol content below 5% will attract a duty of Rs 12 per bulk litre, while beer with alcohol content between 5% and 8% will be taxed at Rs 20 per bulk litre, as reported by Deccan Herald.
Excise Minister RB Thimmapur confirmed on Thursday that while discussions on further price adjustments are ongoing, no final decisions have been made, according to a report by India Today.
This latest notification follows the Siddaramaiah-led government’s proposal in August 2024 to increase excise duty on strong beer. The move comes on the heels of earlier hikes in the July 2023 state budget, which saw a 20% increase in duties on Indian Made Foreign Liquor (IMFL) and a 10% rise in beer prices.
If implemented, this will mark the third beer price hike in Karnataka in just over a year, sparking debates over the government’s revenue strategies amid rising costs across various sectors. Beer lovers and industry stakeholders are preparing for the impact of these frequent increases, which could further strain consumer budgets.
In a related development, United Breweries, the producer of popular beer brands such as Heineken and Kingfisher, has halted supplies to the Telangana Beverages Corporation Limited (TGBCL), the state-run liquor distribution body. As a result, its products will no longer be available in Telangana, one of India’s largest liquor markets. The company cited “significant and ongoing operating losses” as the reason for the decision, despite sustained efforts over the past two years to maintain operations in the state.
The dual developments in Karnataka and Telangana highlight the challenges faced by both consumers and the alcohol industry amid shifting regulatory and economic landscapes.
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