The Karnataka government has announced a 5% increase in prices for beer and lower-range Indian-made liquor (IML), effective May 15, 2025. This marks the fourth such hike in the past two years, raising concerns among consumers and industry stakeholders.
Details of the Price Hike
The recent adjustment involves an increase in the Additional Excise Duty (AED) on beer from 195% to 200%. Initially, a 10% hike was proposed, but following appeals from the Federation of Wine Merchants Association Karnataka, the government scaled it down to 5%.
This price revision affects both beer and lower-range IML, leading to an increase of ₹10 to ₹45 per 650ml bottle, depending on the brand.
Industry and Consumer Reactions
The Brewers Association of India (BAI), representing major beer producers like AB InBev, Carlsberg, and United Breweries, has expressed concern over the frequent tax hikes and regulatory changes. They argue that such measures make beer less affordable and could negatively impact sales and tax revenues.
Bar and wine shop owners in Bengaluru have reported disruptions in the supply chain due to the sudden price increase and new labeling requirements mandating the declaration of sugar content on beer bottles. These changes have led to delays in production and distribution, causing shortages in some areas.
Government’s Perspective
The state government justifies the price hike as a necessary step to boost revenue, especially in light of the increased excise revenue target of ₹40,000 crore for the financial year 2025-26. Officials also suggest that higher beer prices might encourage consumers to opt for IML, which has seen a decline in sales.
Summing Up
The latest price hike in Karnataka‘s liquor market reflects the government’s efforts to increase revenue but has sparked concerns among consumers and industry players. As the state navigates these changes, the balance between fiscal objectives and market stability remains a critical consideration.
