BENGALURU: Karnataka is running low on Indian Made Liquor (IML) due to a dispute between distillers and the Excise Department over new pricing rules. The deadlock has prevented distillers from supplying their products to the Karnataka State Beverages Corporation Limited (KSBCL), which handles the distribution of duty-paid liquor in the state.
Distillers haven’t been able to update their pricing as required by a new government notification issued on August 23. This has led to a halt in transactions with KSBCL, causing a potential daily revenue loss of Rs 110 to 120 crore for the state. If the situation isn’t resolved soon, the available stock of IML could run out.
Distillers met with excise officials on Wednesday to urge them to approve the new pricing. While there was some positive feedback, a resolution may take some time. The government is working to address the issue, but the process could take up to a week, partly due to the visit of the 16th Finance Commission team led by Arvind Panagariya, which is currently focusing on state matters.
In the meantime, liquor retailers in Bengaluru are seeing their IML stock levels drop to around 30%, leading them to push less popular brands to customers.
The government has recently adjusted the Additional Excise Duty (AED) on higher slabs of IML and set minimum prices for distillers. There are now 16 excise slabs for IML, down from 18, though the new pricing for alcohol brands hasn’t been specified yet.
Additionally, there may be a price increase for craft and draught beer, with the AED potentially rising from 150% to 185% per bulk liter. The new rates will vary depending on the beer’s alcohol content.
