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Whether this price increase will be passed on to consumers depends on the decisions made by liquor and beer companies.
Karnataka beer prices are set to hike. (Reuters image used for representation)
Beer prices in Karnataka are set to rise as the government has announced an increase in Additional Excise Duty (AED) from 195% to 200%. Cheaper Indian Made Liquor (IML) brands will also see a price increase of Rs 15 to Rs 20 per 180 ml quart.
The Deccan Herald reported that the Karnataka government, under the leadership of CM Siddaramaiah, officially confirmed the AED hike for beer and budget IML brands.
Initially, a draft notification had suggested raising the AED by 10%, from 195% to 205%, but it was revised to a 5% increase.
This marks the fourth price hike in Karnataka in less than two years.
The Federation of Wine Merchants’ Association, Karnataka, and the Brewers’ Association of India (BAI) have opposed this move and submitted a letter of objection.
IML brands are categorized into 16 price slabs, each with different AED rates. The new hike affects the first four, most economical slabs of IML.
Whether this price increase will be passed on to consumers depends on the decisions made by liquor and beer companies, according to Deccan Herald, citing Vinod Giri, Director General of BAI.
“The beer market in Karnataka experienced contraction in some months due to previous excise hikes, an unusual occurrence. Growth also stagnated at 1%. Such decisions could hurt the government’s revenue if beer sales decline further,” he noted as per the DC report.
The Federation of Wine Merchants’ Association Karnataka, Bengaluru, also voiced their opposition in a letter to the Chief Secretary of the state Revenue Department. They stated that repeated AED increases for economical slabs have led to a 3% drop in IML sales from 2024 to 2025.
The federation urged the government to reconsider the price hike and suggested lowering the rates, warning that persistent increases could lead to illegal alcohol transportation from neighboring states. Their appeal, however, was not successful.
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