The Indian state’s new duty structure could make it the costliest place to buy beer in the country

Beer prices in Karnataka are set to rise from January 20 following the state government’s approval of a new duty structure, according to local reports. The decision, formalised in a final notification issued recently, is expected to make Karnataka one of the costliest states for beer in India, despite objections from the Brewer’s Association of India (BAI).

Under the revised pricing structure, beer with an alcohol content below 5% will incur a duty of INR12 (USD0.14) per bulk litre, while beer with an alcohol content between 5% and 8% will face a duty of INR20 per bulk litre.

Premium beer priced at INR300 per bulk litre will attract an additional duty of either 195% or INR130 per bulk litre, whichever is higher. Draft beer exceeding a specified price threshold will face an additional duty of either 185% or INR120 per bulk litre.

Retail prices for select premium beer brands are expected to increase by INR10 to INR50 per unit, depending on the brand.

The hike comes after two years of record beer sales in the state and runs counter to the state’s recent move to slash Indian Made Liquor (IML) prices by up to 25% to stimulate sales.

The BAI has warned that the price hike could negatively affect the beer market, arguing that it will drive consumers to reconsider their purchases and harm overall sales. Karnataka’s liquor prices have been revised twice in the past two years, and the state already holds the distinction of having the highest alcohol prices among South Indian states.