Beer prices likely to go up again in Karnataka? Alcohol body writes to CM Siddaramaiah requesting him to revoke the idea

After the Karnataka government drafted a new notification proposing a hike in excise duty based on beer's alcohol content, the prices of strong beers are likely to go up in the state. The Beer Association of India (BAI) asked Karnataka Chief Minister Siddaramaiah to revoke the draft notification as it might trouble the beer makers.

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According to the new draft notification, 10-20% of price increase was proposed on beers that have a high alcohol percentage. Karnataka government also asked the beer manufactures in the state to declare the amount of sugar content in beers for the customers and BAI has also opposed the move.

What did the letter say?

In a letter, BAI said, “The increase proposed in the draft notification would increase the prices by 10-20 per cent in mainstream and premium segments. At the same time, it would make beer unaffordable to the masses with the proposed 35 per cent increase in taxes in this segment.”

The body also said that the revenue to the government might also face a dip due to the low sales. "Due to the impact on MRP, we estimate the tax revenues from the beer category may actually fall to the tune of ₹400 crore revenue from this proposal,” it further added.

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BAI also said that the popular beer makers like United Breweries, ABInBev and Carlsberg have huge investments in the state, and the fresh move might also keep them thinking about the further investments in Karnataka. Meanwhile, the association showed disinterest in revealing the sugar and malt content in beer. “It will mislead and confuse consumers, add an undue compliance burden on beer manufacturers, force breweries to reveal confidential information, and reduce the ease of doing business in the state,” the letter said.

Karnataka's alcohol prices have been revised twice in the last two years. Liquor is most expensive in Karnataka compared to all other south Indian states.

(With agency inputs)