New Delhi New Delhi: The Beer Association of India (BAI) has urged the Karnataka government to withdraw the draft notification which proposes to increase the duty on beer through alcohol content-based classification. He said the move would lead to an average price increase of 10-20 per cent across the mainstream and premium segments. The draft notification includes doubling of excise duty on strong beer to Rs 20 per bulk litre, increasing the minimum billing price for beer in the state to Rs 300 per case and additional excise duty (AED) to 195 per cent of the billing price or Rs 130 per case. It is proposed to use bulk litre, whichever is higher.
The industry body, in a letter to Chief Minister Siddaramaiah, has also asked beer manufacturers to withdraw the proposal to declare the sugar content of beer on the bottle label and limit the use of sugar to 25 per cent of the weight of grain malt. BAI, representing leading beer makers United Breweries, ABinBev and Carlsberg, said these draft notifications are not in the interest of any stakeholder and may result in higher prices for consumers, impacting the ease of doing business in the state and Tax revenue may reduce due to affected sales.
BAI, whose members account for 85 per cent of beer sold in India, said, “The proposed increase in the draft notification will lead to a 10-20 per cent increase in prices across the mainstream and premium segments. Also, the proposed 35 per cent increase in taxes in this segment will The percentage increase will make beer unaffordable for common people.” Beer prices have been increased twice in the last 12 months and a third increase in such a short period of time would be detrimental to industry volumes as well as state revenues from the beer category.
“Due to the impact on MRP, we estimate that this proposal may actually lead to a reduction in tax revenue from the beer category by Rs 400 crore,” BAI said. Apart from the loss in tax revenue, this will also put investments worth over Rs 5,000 crore in 10 brewing companies in the state at risk due to low commercial feasibility and making future investments in capacity expansion doubtful.
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