Bengaluru: Beer lovers in Bengaluru may soon feel the pinch as the state government considers a hike in excise duty on strong beers. The proposed increase, outlined in a new draft notification, suggests that beer prices could rise by 10-20 percent, especially for those with higher alcohol content, as per HT report. This potential change has sparked concern among beer manufacturers, with the Beer Association of India (BAI) urging Karnataka Chief Minister Siddaramaiah to revoke the proposal, fearing it may negatively impact the industry.
Karnataka, already known for having the highest liquor prices among South Indian states, has revised alcohol prices twice in the last two years. The new draft would place an even heavier burden on beer consumers, especially in the premium segment.
BAI’s Concerns Over the Proposal
In a letter to the state government, the BAI expressed worry that this price hike would make beer less affordable to the public. The letter stated, “The proposed 35% increase in taxes on stronger beers could result in a significant drop in sales. We estimate the state’s revenue from beer taxes could decrease by Rs 400 crore if this goes forward.”
Impact on Investments and Compliance Burden
The BAI also mentioned how major beer brands such as United Breweries, AB InBev, and Carlsberg have significant investments in Karnataka, warning that the new policy might make them rethink further expansions in the state. Another contentious part of the proposal is the requirement for beer manufacturers to disclose the sugar and malt content in their products. The association fears this could confuse consumers and complicate operations for breweries, forcing them to reveal sensitive information.
The BAI said that this measure could reduce the ease of doing business in Karnataka and increase compliance costs for manufacturers.
As the debate continues, Bengaluru's beer drinkers and brewers alike are keeping a close eye on the outcome of the proposed excise duty changes.