Bengaluru – The Karnataka government has formally notified an increase in the Additional Excise Duty (AED) on beer and lower-priced Indian Made Liquor (IML) brands, marking the fourth such hike by the Siddaramaiah administration in under two years.
The AED on beer has been raised from 195% to 200%. Meanwhile, economical IML brands are expected to see a price increase of ₹15 to ₹20 per 180 ml quart. The hike affects the first four pricing slabs of IML—the most affordable tiers—each of which has been subject to an upward revision in duty.
An earlier draft proposal had suggested an even steeper AED hike on beer—from 195% to 205%. The Federation of Wine Merchants’ Association Karnataka and the Brewers Association of India (BAI) objected to the proposed rates, warning of negative repercussions on both consumers and industry stakeholders.
Vinod Giri, Director General of the BAI, stated that Karnataka’s beer market has already shown signs of contraction in recent months due to earlier excise hikes—an unusual trend for the state. “Growth has stagnated at around 1%. These decisions risk diminishing government revenues if beer sales decline further,” he said.
The Federation of Wine Merchants’ Association, in a formal letter to the Chief Secretary of the State Revenue Department, reported a 3% drop in sales of IML from 2024 to 2025 within the affected pricing slabs. The organization urged the government to reconsider or reduce the AED increases, warning that continued hikes could encourage the illegal transportation of alcohol from neighboring states. However, the appeal did not yield any policy change.
Industry experts note that the actual impact on retail prices will depend on whether liquor and beer companies choose to absorb the added cost or pass it on to consumers.
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