Premium liquor brands in Karnataka are set to become cheaper after the state government introduced a major overhaul in its excise taxation system. Revised price lists expected to be officially released on Saturday show price cuts ranging from 5% to 23% across several premium whisky, gin and tequila brands.
The move comes after Karnataka became the first Indian state to adopt an Alcohol-in-Beverage (AIB) taxation model. Under the new system, excise duty will now be linked directly to alcohol content instead of the earlier bulk litre-based structure.
The new policy was announced in the Karnataka Budget 2026-27 by the Siddaramaiah government, which also reduced the number of excise slabs from 16 to eight.
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According to industry estimates, premium spirit prices have dropped by an average of around 15% in the revised pricing structure.
Imported Scotch whiskies and international premium spirits have seen some of the biggest reductions. A 700ml bottle of a 12-year-old Scotch whisky earlier priced at around Rs 6,360 will now retail for nearly Rs 5,300. Another leading blended Scotch whisky brand has reportedly become cheaper by more than Rs 1,000 per bottle.
Several premium Japanese whisky brands have also witnessed price cuts of over 20%, while imported gin brands may become cheaper by nearly Rs 500 for a 750ml bottle.
Premium tequila labels in the Rs 8,000 to Rs 18,000 range have also seen reductions of around Rs 1,100 to Rs 1,200 per bottle.
Industry executives said the new taxation framework mainly benefits premium brands because many imported and high-end spirits have alcohol strength levels similar to lower-end Indian-made foreign liquor (IMFL) products. Under the previous slab-based tax structure, premium brands were taxed more heavily despite similar alcohol content.
The development is being seen as a significant step for the alco-beverage industry, as Karnataka is one of India’s largest liquor markets and traditionally among the highest-taxed states for alcoholic beverages.
During its recent earnings call, United Spirits described Karnataka’s new policy as a “progressive intervention” that could support premiumisation in the state.
United Spirits CEO and Managing Director Praveen Someshwar said the company had already started witnessing price reductions of 15% to 35% across parts of its portfolio under the revised tax structure.
Meanwhile, budget liquor categories are expected to become more expensive, especially in the lower-priced 180ml segment, as taxation will now be more closely aligned with alcohol strength.
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