Premium liquor likely to be cheaper by 15-25% in Karnataka

Bengaluru: For liquor lovers, good news is round the corner as the rates of premium spirits across Karnataka are expected to come down by 15 per cent to 25 per cent.

The State Excise Department, in June, had notified the Karnataka Excise (Excise Duties and Fees) (Amendment) Rules, 2024 and DH has learnt that the final notification of the same would be released within the next week, bringing down the price of premium liquor.

According to sources in the Excise Department, the final notification will reduce the number of excise duty slabs for Indian Made Liquor (IML) from 18 to 16 to match the rates in neighbouring states.

“With this, we aim to stop people from procuring premium alcohol from outside Karnataka. This will also boost sales in the state and add to our revenue,” a source in the department said.

Over the last two years, the sale of beer has more than doubled owing to the post-pandemic boom. Incidentally, beer had become the most preferred refreshment option during the super harsh summers.

This measure might help the IMLs to catch up to the beer market.

While the final notification and the revised rates were expected to come into force starting July 1, sources in the industry said that the notification was withheld owing to political reasons.

The delay in releasing the final notification has also put the market on hold as Karnataka State Beverages Corporation Limited (KSBCL) has delayed the issuing of fresh permits due to a lack of clarity on this issue. Many distilleries have also stopped production owing to the uncertainty in the market.

“Many distilleries have stopped production fearing losses since they now produce at a higher cost and will be forced to sell at lower prices once the notification kicks in. Retailers also don’t store premium liquor since any price changes would lead to losses,” explained Karunakar Hegde, Vice-President of the Federation of Wine Merchants Association, Karnataka.

‘Shortage of liquor’

The uncertainty owing to the delay in the final notification has caused a shortage of liquor at the depot level and will affect the retail market if not addressed soon.

While the rates are expected to come down once the final notification is published, sources in the retail liquor business said that it could take at least one to two months for the difference to be reflected at retail outlets.