New delhi, 27 Oct

The Beer Association of India (BAI) has urged the State government to withdraw draft notifications, which proposed a hike in duty through alcohol content-based classification in beer, saying that on average this move would lead to a price increase of 10-20 per cent in mainstream and premium segments.

The draft notification proposes to double the excise duty on strong beer to Rs 20 per bulk litre, increase the minimum billing price for beer in the state to Rs 300 per case and Additional Excise Duty (AED) to 195 per cent of the billing price or Rs 130 per bulk litre whichever is higher.

The industry body has also asked Chief Minister Siddaramaiah to withdraw the proposal asking beer manufacturers to declare the sugar content in the beer on the bottle’s label and capping the use of sugar to 25 per cent of the weight of malt of grain.

BAI, which represents leading beer makers United Breweries, ABInBev and Carlsberg, said these draft notifications are not in the interest of any of the stakeholders and may result in high prices for consumers and impact the trade.

"The increase proposed in the draft notification would increase the prices by 10-20 per cent in mainstream and premium segments. At the same time, it would also make beer unaffordable to the masses with the proposed 35 per cent increase in taxes in this segment," said BAI, whose members account for 85 per cent of the beer sold in India.

Prices of beer have been increased twice in last one year and Karnataka is a very important market for the beer industry and it is recognised for its strong beer culture which has been made possible by supportive and progressive policies by the Government. -PTI