The prices of beer in Karnataka are likely to increase as the state government issues a final notification regarding the price hike.
The mainstream and premium segments of the beers are estimated to see an increase of 10 to 20 per cent in the cost, making it the third increase in a span of one year.
According to Asianet, the final notification was issued by the state government on Wednesday, and the new rates would come into effect from January 20, 2025.
However, Excise Minister RB Thimmapur confirmed that no additional decisions had been made yet.
In October 2024, the Beer Association of India (BAI), which represents leading beer makers United Breweries, ABInBev and Carlsberg, urged the Karnataka government to withdraw draft notifications.
In a letter to the government, the BIA had mentioned that the price hike was not in the interest of consumers, impacting the Ease of Doing Business in the state.
What did Beer Association of India say in October
— Due to the impact on MRP, we estimate the tax revenues from the beer category may actually fall to the tune of ₹400 crore revenue from this proposal.
— It would put over ₹5,000 crore investment in 10 breweries in the state at risk due to low commercial viability
— It will make future investment into capacity expansion doubtful.
— High prices and reduced volumes will hit sales, lower manufacturing activity, and impact trade as well as the hospitality industry.
The draft amendment had proposes to reclassify beer into three subclasses and apply differential excise duty for each of them, as against a uniform rate on all beer, reported PTI.
Beer supply to Telangana Beverages Corporation suspended
Earlier this week, United Breweries Ltd (UBL), which operates with popular beer brands, announced to suspend the supply of its beer to Telangana State Beverages Corporation with immediate effect.
The decision was taken due to the non-revision of the basic price of the company’s beer from 2019-20 by Telangana Beverages Corporation Ltd (TGBCL).
