Beer prices up in Karnataka, breweries told to cut down on sugar content

Beer prices will, henceforth, depend on the content of alcohol.
Beer prices up in Karnataka, breweries told to cut down on sugar content
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BENGALURU: Beer prices have been revised in the state. The revised prices came into effect on Monday. The state government issued a draft notification regarding increase in duty on beer on August 23, 2024. The final notification on the same was issued on January 8.

Beer prices will, henceforth, depend on the content of alcohol. It has been categorised into two slabs, depending on the alcohol content. The Excise Duty (ED) on mild beers with alcoholic content less than or equal to 5% v/v has been pegged at Rs 12 per bulk litre (pbl) and Rs 20 pbl for stronger beers containing 5-8% alcohol. Earlier, the ED on beer was Rs 10 pbl, irrespective of alcohol content.

“Minimum price of all strong beers will not be lower than Rs 145. Legend beer, which was priced the lowest, at Rs 100 for a 650ml bottle, will now cost a minimum Rs 145. There won’t be much difference in premium beer pricing,” sources said.

In a first, the government has made it mandatory for breweries to prepare beer -- fermented liquor “from malt or grain with or without sugar and hops, and include ale, black beer, porter, stout and spruce beer” and ensuring that the sugar content is “not more than 25% by weight.”

“All breweries will, henceforth, have to mandatorily declare the ingredients of beer. Sugar content can be zero, but not above 25% by weight. The new rates came into effect today. For the new labels, the Excise Department has given time to breweries till February 1,” the sources said.

“One of the reasons for higher pricing is to restrict youth from getting initiated into drinking, which usually starts with beer,” sources said.

“Strong beers contribute 75% of the total beer sales in the state and some of them ferment using high sugar content instead of malt. This is injurious to health,” informed sources said.

This is the third revision in beer prices by the Congress government in the state since July 2023. The first hike was in the July 2023 budget in which the CM announced a 10% hike in Additional Excise Duty (AED) on beer and 20% hike in AED on all the then 18 slabs of Indian Made Liquor (IML).

“In January last, AED on beer was increased by 10% — from 185% of the declared price to 195% of the declared price,” the sources said.

Though the government rationalised IML prices last year, collection of Excise revenue for 2024-’25 has been tardy. “Increase in beer prices is also a move to bridge the gap and increase revenue collection. Around five to 10% of IML consumers had shifted to strong beer post 2023 budget. With hike in beer prices, the effort is to wean this segment of consumers back to IML. The first four slabs (lowest) of IML are the major revenue generators and contribute 78% towards Excise revenue,” the sources said.

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