Liquor sales in Karnataka have dropped after the State government hiked additional excise duty (AED) on both Indian-made liquor (IML) and beer. In his Budget on July 7, Chief Minister Siddaramaiah hiked the AED on IML by 20% on all slabs and increased the AED on beer from 175% to 185%.
According to a statement from the Federation of Wine Merchants’ Association, Karnataka, sales and revenue have seen a sharp dip in the first fortnight in August.
“In July this year, the department recorded a 19.27% increase in the sales of IML when compared with that in the corresponding period in 2022. While 54.89 lakh boxes were sold in July 2022, 65.46 lakh boxes were sold in July 2023. Similarly, sales of beer saw a 26.83% rise in July 2023 when compared with the sales in the corresponding period in 2022. Although the new prices came into effect from July 20, retailers would have sold their stocks at the old prices till the month-end,” said B. Govindraj Hegde, general secretary of the association.
But over the first 15 days of August, only 21.87 lakh boxes of IML were sold. This is a 14.25% dip when compared with the sales recorded in August 2022 in the same period, he said. However, beer sales have seen a rise by 21.07% when compared with that in the first fortnight of August in 2022.
Fake brands
Claiming that the hike in the AED has also resulted in rampant sales of fake brands of liquor, Mr. Hegde alleged that it could not happen without the support of officials. “Fake brands of liquor from Telangana, Maharashtra, and Goa labels have entered the market in some districts. Besides, fake brands with labels of ‘military canteen’ and ‘duty free’ are also being sold,” he alleged.
“Overall, retailers have recorded a 10 to 15% slump in revenue following the hike. Consumers have also switched over from higher value brands to lower ones,” he added.
