Bengaluru | October 7, 2025
Liquor and beer sales in Karnataka have dropped noticeably following the state government’s steep hike in excise duty earlier this year. According to data from the Excise Department, the higher taxes have led to a slowdown in alcohol consumption across the state.
Between April and September 2023, Karnataka recorded sales of 352 lakh litres of Indian-Made Liquor (IML). The number fell to 345 lakh litres in 2024 and further declined to 342 lakh litres in 2025, showing a consistent dip over the past three years.
The fall has been sharper in the beer segment. Sales have dropped by nearly 19%, from 242 lakh boxes between April and September 2024 to just 195 lakh boxes during the same period in 2025—a reduction of 47 lakh boxes. Officials said that the dip in beer sales has been noticeable month after month.
Despite lower sales volumes, the state’s excise revenue has actually gone up, thanks to the higher tax rates. The department’s revenue rose from ₹17,702 crore in 2024 to ₹19,571 crore in 2025, suggesting that increased taxation per unit has compensated for the decline in total sales.
The Karnataka government had increased the Additional Excise Duty (AED) on liquor and beer in mid-May 2025—the fourth price hike in two years. The AED on beer went up from 195% to 200% of the production cost, raising the price of premium beer by ₹10–₹15 per bottle.
Similarly, cheaper variants of whisky, rum, and gin also saw price increases of up to ₹15 per bottle, as the duty on lower slabs of IML was raised.
Officials said the decision to raise excise duty was aimed at meeting higher revenue targets. However, industry experts have warned that repeated price hikes could hurt overall sales and may encourage the consumption of illicit liquor.
