Hyderabad: Prices of beer, whisky, and other alcoholic beverages in Telangana are likely to increase soon, with the state government expected to revise rates from May. The proposed hike comes as producers face rising costs and supply challenges.
One of the main reasons behind the expected price increase is the disruption in natural gas supply due to geopolitical tensions in West Asia involving countries like United States, Israel, and Iran. This has significantly raised the cost of manufacturing glass bottles, which are widely used in the liquor industry.
As a result, production at major glass factories across India has reportedly dropped by nearly 40%. Some units have reduced output due to limited gas supply, while others have temporarily shut down. This has led to around a 20% increase in the cost of empty bottles, putting additional financial pressure on distilleries.
Industry players have approached the excise department, requesting a price hike of 12% to 15% to offset these rising costs. They say the current pricing structure is no longer sustainable.
Liquor prices in Telangana are usually revised every two years. The last revision took place in May 2023, and the next was due in May 2025. However, the process was delayed, and the government has now initiated a fresh review. A judicial panel led by a retired judge has been set up to study the issue, taking into account global factors as well as industry demands.
Instead of a flat increase, the government is considering a tiered pricing system. This could include multiple price slabs based on bottle size (from 90 ml to 750 ml), product category, and tax structure. This means different price hikes for budget and premium segments.
Beer prices, in particular, may see a noticeable rise. Demand for beer typically increases by around 30% during the summer, but ongoing shortages of glass bottles and rising aluminium can costs are adding pressure on supply. Despite a recent price hike in February, companies are now seeking another revision. Early estimates suggest beer prices could go up by ₹15 to ₹25 per bottle.
The liquor industry is a major source of revenue for the state, contributing around ₹40,000 crore annually. Officials are concerned that prolonged supply issues could also lead to increased illegal sales.
Overall, global supply disruptions are now beginning to impact local markets, and consumers may soon have to pay more for their favourite drinks, especially during the peak summer season.
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