Liquor lovers in Karnataka can soon enjoy lower prices on premium spirits, with expected reductions ranging from 15% to 25%. The State Excise Department has revised the Karnataka Excise (Excise Duties and Fees) Rules, 2024, and a final notification is expected within a week to officially implement these price cuts.
Excise Duty Changes
The updated rules will streamline the excise duty system for Indian Made Liquor (IML), cutting the number of duty slabs from 18 to 16. This move is designed to bring Karnataka’s liquor prices more in line with those in neighboring states. An Excise Department source explained, “We aim to prevent people from buying premium alcohol from outside Karnataka and boost local sales, which will also increase our revenue.”
Impact on the Market
Beer sales have been booming recently due to post-pandemic trends and hot weather, making it a popular choice. This new pricing strategy could help premium liquors compete better with beer. However, the delay in finalizing the new rules has led to market uncertainty. The Karnataka State Beverages Corporation Limited (KSBCL) has halted the issuance of new permits, and many distilleries have stopped production due to the confusion.
Karunakar Hegde, Vice-President of the Federation of Wine Merchants Association, Karnataka, noted, “Distilleries are halting production because they face higher costs now and will have to sell at lower prices once the new rules are in effect. Retailers are also avoiding stocking premium liquor to avoid losses from potential price changes.”
Retail Impact
This delay is causing shortages at depots, which could affect retail availability. Even though prices are expected to drop after the final notification, it may take one to two months for these changes to be seen at retail outlets. The goal of this price reduction is to reduce cross-border alcohol purchases and boost local sales to increase state revenue. As consumers await the new prices, industry experts are watching closely to see how quickly these changes will reach retail stores.
