Bengaluru, 2 May

After the recent price rise in electricity, milk and diesel, the Karnataka government’s proposed hike in beer prices—its third in just two years—has sparked outrage among consumers within the brewing industry.

According to a draft notification issued by the State Excise Department, the government intends to raise the Additional Excise Duty (AED) on beer by 10 per cent which could increase beer prices by Rs 10 to Rs 20 per bottle. Lower-end and local brands prices could increase by Rs 5, while premium brews are expected to become dearer by Rs 15.

"This is daylight robbery disguised as taxation," said Abhinav Rao, a 32-year-old techie from Indiranagar. "It feels like the State is trying to balance its budget on our weekends."

The proposal, which allows for a 7-day window for public objections, comes on the back of a long-term plan to rake in Rs 40,000 crore in revenue from alcohol sales alone in this fiscal. Beer, despite comprising just 8 per cent of liquor sales by volume, contributes a whopping 16 per cent to the state’s excise revenues.

"It’s a tax on leisure," said Ramesh Mehta, a small business owner in Jayanagar. "We’re paying the price for the state’s economic mismanagement. Beer is already a luxury for many; now it will become unaffordable."

Retailers are also unimpressed. "Sales have already dipped since the last two price hikes," said Murali Hegde, a beer shop owner in Rajajinagar. "Another increase will drive more people to cheaper or illegal alternatives."

Echoing similar concerns, Seema K, a liquor store supervisor in Koramangala, noted, "We get the same complaints every time—‘why is beer more expensive again?’ People are simply buying less or shifting to stronger spirits."

The Brewers’ Association of India (BAI) has formally protested the hike in a letter to Chief Minister Siddaramaiah, calling it "unprecedented" and warning that the state’s 11 breweries—employing nearly 7,000 people—could soon become financially unviable. BAI Director-General Vinod Giri said the AED on beer has jumped from 175 per cent in 2023 to a staggering 205 per cent now.

"Beer prices have risen from Rs 160 to Rs 200 per bottle. Growth has dropped from 46 per cent to 1 per cent in just two years. That should worry any policymaker," Giri wrote.
With simmering discontent of beer lovers and mounting opposition from industry, it remains to be seen if the government will plough ahead with this move.