The International Spirits and Wines Association of India (ISWAI) has raised serious concerns over Maharashtra’s latest liquor policy changes. The state government has introduced a new liquor category called Maharashtra-Made Liquor (MML) and significantly increased taxes on Indian Made Foreign Liquor (IMFL).
ISWAI fears that these changes may backfire, leading to a surge in illicit liquor sales, a drop in state revenue, and increased health risks to the public.
What’s Changing?
-
The new policy, announced on June 10, revises the excise duty on IMFL, moving to a cost-based taxation model that will push up prices.
-
A new liquor category, MML, will be introduced—made only by local manufacturers using grain-based spirits.
-
MML bottles (180 ml) will cost between ₹150 and ₹205, while IMFL in the same quantity is expected to become ₹100–₹130 more expensive due to the new tax.
-
Beer and wine have been exempted from this tax hike, and so has MML, making it cheaper than IMFL.
ISWAI’s Key Concerns
-
Illicit Liquor Surge: With IMFL becoming more expensive, consumers may turn to unregulated or illegal alternatives.
-
Revenue Drop: Instead of boosting income, higher IMFL taxes might lower sales and reduce the government’s tax collection.
-
Public Health Risks: A rise in consumption of low-quality or illegal liquor could result in serious health issues.
-
Slow Rollout of MML: MML production is expected to take at least six months to ramp up, leaving a possible supply gap in the market.
-
Pressure on Farmers and MSMEs: If IMFL demand drops, so will the demand for grain-neutral spirits sourced from rural farmers. Related industries—like packaging, bottling, and logistics—could also be hit hard.
-
Smuggling Threat: Lower liquor prices in neighboring states like Goa and Madhya Pradesh might encourage illegal smuggling into Maharashtra.
Industry Appeal
ISWAI CEO Sanjit Padhi urged the state to rethink the policy, warning that such a sudden shift could disrupt the industry. He suggested a slower, more balanced approach to tax changes, pointing out that similar experiments in other states had not succeeded in the long run.
ISWAI members represent over 45% of India’s liquor volume and over 55% of its market value, with more than 95 manufacturing units across the country. The association emphasized that their investments and operations could be negatively impacted if this policy isn’t handled carefully.
In conclusion, ISWAI called on the government to reconsider the tax hike and ensure that both consumer welfare and state revenues are protected.
