Liquor prices in Karnataka may soon see a significant hike, as Chief Minister Siddaramaiah announced a review of alcohol rates while presenting the state’s Budget for 2025-26. The move aims to align prices with neighboring states and boost excise revenue, which is a major contributor to the state’s finances.
Excise Tax Target Increased
During his Budget speech, CM Siddaramaiah revealed that Karnataka’s excise tax collection stood at ₹36,500 crore last year. For the upcoming fiscal year, the government has set an ambitious target of ₹40,000 crore. To achieve this, an increase in liquor prices seems inevitable.
Beer Prices Already Impacted
Beer drinkers in Karnataka have already felt the pinch after an excise duty hike on January 20, which led to an increase of ₹10 to ₹45 per 650ml bottle, depending on the brand. The state justified this decision as a necessary step to bridge the revenue gap, despite witnessing strong liquor sales earlier in the year.
Excise Duty Surge & Vendor Concerns
Reports indicate that the excise duty has jumped from 185% to 195% of the billing price or ₹130 per bulk litre—whichever is higher. This has caused a notable rise in liquor prices, with bottles that previously cost ₹100 now retailing at ₹145, while ₹230 bottles have increased to ₹240.
Liquor vendors have expressed concerns over the impact of rising prices on sales, particularly for beer. The Federation of Wine Merchants’ Associations noted a 10% decline in beer sales, with stock shortages further affecting business. Breweries had slowed production in anticipation of the hike, creating supply chain disruptions.
Summing Up
With a higher revenue target and ongoing price revisions, Karnataka’s liquor market is headed for another surge in costs. While the government sees this as a necessary financial measure, consumers and vendors alike are bracing for its impact. Whether these hikes will significantly alter consumption patterns remains to be seen.
