BENGALURU: Ahead of the state budget, the Siddaramaiah government is proposing to increase the prices of beer by 10%.
After the proposed revision, a 650ml bottle of beer would cost an additional Rs 8 to Rs 10 per bottle. The government issued a notification on January 20 seeking public objections by January 26. The official order on revised beer prices will be issued by January-end.
The reason for the sudden pre-budget hike is being attributed to an alleged lack of resources and to win back consumers of Indian Made Liquor (IML), who have shifted to strong beer after Chief Minister Siddaramaiah increased the Additional Excise Duty (AED) by 20% on all 18 slabs of IML in his budget in July, 2023.
“Around five to 10% of IML consumers have shifted to strong beer post the budget. The increase in beer prices is an effort to wean them back to IML. The government is losing out on Excise revenue because of the shift,” sources said.
In the budget to be presented in February, Siddaramaiah may not increase AED on IML and beer because of the impending Lok Sabha elections, they said. With the Congress government allocating Rs 50,000 crore for its five guarantee schemes in May last, “the move to further tax alcohol to raise resources,” was anticipated, the sources said.
‘K’taka ‘most expensive’ for spirits in India’
Apart from a 20% increase in AED on all 18 slabs of IML, the CM had also announced a 10% hike in the prices of beer. He had also increased the revenue target for the Excise Department for 2023-’24 to Rs 36,000 crore from the earlier Rs 32,000 crore announced by the then chief minister Basavaraj Bommai in February last.
Meanwhile, reacting to the proposed increase in the prices of beer, Excise Minister RB Timmapur said, “I cannot comment on this immediately. It (the decision to increase beer rates) is being discussed. Since there is a budget, I cannot tell anything.” Earlier, citing the 20% increase of additional excise duty on premium brands, the International Spirits and Wine Association of India termed Karnataka the ‘most expensive’ state for spirits in India.