Beer sales in Karnataka have surged by 41.32% during the first half of 2026-27, driven in part by the state’s Alcohol in Beverage (AIB) policy, which reduced the maximum retail price of select beer and premium Indian Made Liquor (IML) brands. According to the Karnataka Excise Department, beer-related revenue rose significantly between April and September 2026 compared with the corresponding period last year, strengthening the state’s overall excise revenue collection ahead of the festive season.
The Excise Department collected ₹3,377.88 crore from beer sales during April-September 2026, compared with ₹2,836.64 crore during the same period in 2025. This represents an increase of ₹541.24 crore in beer-related revenue. Overall, Karnataka’s excise revenue collection increased by 13.39% during the first six months of the financial year, reaching ₹22,191.63 crore compared with ₹19,570.23 crore in the corresponding period last year. The total includes revenue from IML, beer, licence fees, fines and other excise-related sources.
Karnataka has set an excise revenue target of ₹45,000 crore for 2026-27. With ₹22,191.63 crore already collected in the first six months, the department has achieved nearly half of its annual target, while the upcoming festive season is expected to provide additional momentum to liquor sales and excise collections.
The AIB policy, implemented on May 11, 2026, reduced the MRP of lager beers containing 5% alcohol by volume as well as selected premium IML brands, including Scotch whisky. The policy appears to have had a particularly strong impact on beer sales. Beer sales grew by 34.92% between April and June, before accelerating to 49.69% between July and September, resulting in an overall growth of 41.32% during the April-September period compared with the same period in 2025.
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In contrast, IML sales recorded a much more modest growth of 1.14% during the first six months of the financial year. The Excise Department collected ₹17,424.57 crore from IML during April-September 2026, compared with ₹15,376.22 crore during the same period last year. Despite the slower growth in volume and revenue compared with beer, IML remains a major contributor to Karnataka’s excise finances.
Industry sources said the increase in IML revenue has primarily come from the lower-priced IML slabs, with prices ranging from around ₹90 for the first slab to ₹165 for 180 ml in the fourth slab. These segments account for more than 70% of Karnataka’s total excise revenue, highlighting the importance of affordable spirits to the state’s liquor revenue structure.
The sharp rise in beer sales following the AIB policy indicates a significant shift in Karnataka’s alcoholic beverage market, with lower beer prices potentially encouraging higher consumption and stronger demand. With the festive season ahead, the state’s beer market and overall excise collections are expected to remain closely watched as Karnataka moves towards its ₹45,000-crore revenue target for 2026-27.
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