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After last year’s beer price hike, the Karnataka government is considering another round of increase, leaving alcohol consumers bracing for a bitter sip.
The first increase, a 10 per cent increase in 2023 state budget, led to beer prices going up by Rs 10-15 per 650 ml bottle.
In February 2024, the state government again increased beer prices by 10 per cent; the second rise led to another Rs 15 hike per bottle. Additionally, the Siddaramaiah-led government had proposed higher excise duties on “strong beer” in August 2024. If approved, this would mark the third beer price hike in Karnataka in just over a year.
The only solace for beer enthusiasts is that discussions for potential hike were still underway. Excise Minister RB Thimmapur, on Thursday (January 9), confirmed there were discussions though no final decision has been made. “We are not planning to increase the price of liquor as of now, except for beer. We are contemplating a price hike for beer. However, we have not yet discussed this with the Chief Minister to finalise the decision,” Thimmapur explained.
Previously, the Brewers Association of India (BAI) had expressed concern about the cumulative effect of these hikes. In October 2024, the BAI warned that the proposed increases, along with new labeling rules and stricter alcohol content classifications, could harm the beer industry and reduce the state’s revenue. The association urged the government to reconsider its position, citing the potential negative impact on both consumers and the economy.
In addition to labeling concerns, the proposed excise duty hike on strong beer, which constitutes 90 per cent of Karnataka’s beer market, could lead to prices rising significantly. The state government sent a draft notification suggesting that excise duty on strong beer could double to Rs 20 per litre, while the minimum case price for beer would increase to Rs 300. This move could make Karnataka’s beer prices some of the highest in India, with per-bottle prices potentially climbing from Rs 95 to Rs 140.
The BAI warned that such increases could result in decreased beer sales, cross-border smuggling, and ultimately a decline in the state’s tax revenue. With over 11 breweries operating in the state, Karnataka has been a hub for beer production, but the BAI fears that these new policies could drive companies away and stunt future growth in the industry.
The Karnataka government’s focus on raising excise duties has been evident in previous budgets as well. In July 2023, Chief Minister Siddaramaiah announced a 20 per cent hike in excise duties on Indian Made Foreign Liquor (IMFL), alongside an increase in excise duties on beer. The latest proposals are likely to continue fueling the debate on the economic and social impacts of such hikes.
As the discussions continue, the state government faces pressure from both industry leaders and consumers. The BAI has called on the government to reassess its position and adopt policies that support both public health and the long-term growth of the beer industry, rather than imposing punitive measures that could drive away investment and harm consumers.
