United Spirits reported a 22.7% year-on-year decline in net sales value of its popular liquor portfolio to ₹181 crore in the second quarter of FY2027, as changes in state excise policies in Maharashtra and Karnataka affected demand and sales of lower-priced alcoholic beverages. The Diageo-owned company attributed the pressure largely to higher taxes on non-local liquor brands in Maharashtra and revised excise duty structures in Karnataka.
Despite the decline in its mass-market business, United Spirits recorded a 2.8% increase in overall net sales value to ₹3,258 crore during the quarter, supported by stronger performance from its premium and luxury portfolios. Its Prestige and Above segment registered 6.3% growth in net sales value, reflecting continued demand for higher-priced spirits and new product offerings.
Maharashtra’s revised excise framework created a separate preferential category for locally manufactured liquor, allowing lower duty rates for Maharashtra Made Liquor while increasing excise duties on standard Indian Made Foreign Liquor (IMFL). The resulting tax differential placed non-local brands at a competitive disadvantage in the state’s retail market, putting additional pressure on companies with significant exposure to popular-priced products.
Karnataka also revised its excise duty structure by moving towards taxation based on alcohol content rather than product retail value and reducing the number of pricing slabs. The changes affected manufacturer realisations and distribution volumes, particularly in the lower-priced liquor segment.
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For the first half of FY2027, the Prestige and Above portfolio recorded 7.8% growth in net sales value. The company’s overall net sales value increased 4.2% to ₹5,961 crore during the six-month period.
Management also indicated that regulatory restrictions in Maharashtra and logistical challenges affecting export operations had limited the company’s growth potential. The results underline the increasing influence of state-level excise policies on liquor manufacturers and highlight how premiumisation is helping United Spirits offset weakness in its popular brands.
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