The Karnataka government has increased the Additional Excise Duty (AED) on beer from 195% to 200%, a move expected to lead to a rise in retail prices. Alongside, prices of lower-tier Indian Made Liquor (IML) brands are also set to climb by ₹15 to ₹20 per 180 ml quart.
According to a report by Deccan Herald, the announcement was made under the leadership of Chief Minister Siddaramaiah. The final decision followed a revision to an earlier draft notification, which had proposed a steeper AED increase to 205%. Instead, the government opted for a 5% hike.
This marks the fourth alcohol price hike in Karnataka in under two years.
The Federation of Wine Merchants’ Association, Karnataka, and the Brewers’ Association of India (BAI) have opposed the latest increase. A formal letter of objection was submitted by the associations, urging the state to reconsider the move.
The hike targets the first four slabs of IML pricing—categories considered the most economical—out of a total of 16. Whether the increase in AED will be passed on to consumers remains at the discretion of liquor and beer companies, Deccan Herald reported, citing BAI Director General Vinod Giri.
Giri warned that the decision could negatively impact state revenue if beer sales decline further. “The beer market in Karnataka experienced contraction in some months due to previous excise hikes—an unusual trend. Growth has stagnated at around 1%,” he said.
Echoing the concern, the Federation of Wine Merchants’ Association of Karnataka submitted another letter to the Chief Secretary of the Revenue Department. The association noted that repeated increases in AED for budget liquor categories have already resulted in a 3% decline in IML sales between 2024 and 2025.
The letter also cautioned that continuous hikes might incentivize illegal transportation of alcohol from neighboring states. Despite the concerns raised, the appeal was unsuccessful.
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