Liquor companies took a hit on June 11 after the Maharashtra government announced a steep hike in excise duty on alcoholic beverages—the biggest such increase since 2011.
Popular stocks like United Breweries, United Spirits, Allied Blenders & Distillers, and Radico Khaitan fell by up to 5% in morning trading. The sell-off was triggered by concerns that higher prices could reduce alcohol consumption, especially in a state that accounts for 10–12% of India’s liquor market.
On the other hand, companies like Sula Vineyards, GM Breweries, and Som Distilleries gained between 5.5% and 12%. Investors believe these Maharashtra-based producers may benefit from a newly introduced category: Maharashtra Made Liquor (MML), which could boost their market presence.
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Under the revised rates approved by the state cabinet:
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IMFL (Indian Made Foreign Liquor) duty will now be 4.5 times the manufacturing cost (earlier it was 3x), up to ₹260 per bulk litre.
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Country liquor duty increases from ₹180 to ₹205 per proof litre.
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Revised minimum retail prices:
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Country liquor: ₹80 (was ₹70)
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MML: ₹148 (new category)
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IMFL: ₹205 (was ₹110–115)
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Premium foreign liquor: ₹360 (was ₹210)
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As a result, the Maximum Retail Price (MRP) of IMFL could go up by 30% to 50%.
The state expects to raise an additional ₹14,000 crore annually from this move.
Broader Reforms
In addition to the tax hike, the Maharashtra government has announced administrative reforms:
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A new AI-enabled control room will monitor the operations of distilleries, manufacturers, and wholesalers.
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New offices will be set up in Mumbai, Thane, Pune, Nashik, Nagpur, and Ahilyanagar to improve enforcement and reduce illegal alcohol sales.
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