The Karnataka Government on January 8 has issued a final notification with regard to hike in beer prices. The draft notification on increase in duty on beer was made first on August 23 last year. According to the Excise Department, henceforth, beer prices will be linked to the content of alcohol in it.
This is the third revision in beer prices by the Congress government in the state since July 2023. The first hike was in the July 2023 budget in which the Chief Minister had announced a 10% hike in Additional Excise Duty (AED) on beer and 20% hike in AED on all the then 18 slabs of Indian Made Liquor (IML). In January 2024, AED on beer was increased by 10% – from 185% of the declared price to 195% of the declared price.
Beer pricing has been categorised into two slabs, depending on the alcohol content. The Excise Duty (ED) on mild beers with alcoholic content less than or equal to 5% v/v has been pegged at ₹12 per bulk litre (pbl) and ₹20 pbl for stronger beers containing 5-8% alcohol. Earlier, the ED on beer was ₹10 pbl, irrespective of alcohol content.
Karnataka has made it mandatory for breweries to prepare beer – fermented liquor “from malt or grain with or without sugar and hops, and include ale, black beer, porter, stout and spruce beer” and ensuring that the sugar content is “not more than 25% by weight.” Breweries have been asked to declare the ingredients of beer.
In Karnataka, nearly 75% of total beer sales is accounted for by strong beers and some of the breweries ferment using high sugar instead of malt.
The Congress government explained that the hike was necessary to plug the revenue gap in the excise department, despite increase in liquor sales. The President of the Federation of Wine Merchants’ Associations, Karunakar Hegde said the hike is going to impact the market adversely. He added that supplies of beer had been affected and production had slowed down.
