Karnataka Beer Sales Surge 41% as New Alcohol Tax Boosts Revenue

Bengaluru: Beer sales in Karnataka rose 41.3% year-on-year during April-September, reversing a 19% decline in the corresponding period last year, according to govt figures cited by the Brewers Association of India (BAI).The state’s liquor tax collections increased 13.4% to Rs 22,191 crore during the six months. Collections had grown 2.8% in the same period last year, the industry body said.The sharp recovery in beer contrasted with slower growth in spirits. Sales of Indian-made foreign liquor (IMFL), which includes whisky, rum and vodka, increased 1.1%. Tax collections from the category rose 13%, while those from beer increased 19%.BAI linked the performance to Karnataka’s alcohol-in-beverage taxation framework, introduced on May 11. The system levies excise duty on the actual quantity of alcohol in a beverage. An additional excise duty is linked to the product’s value.“Several other states are keenly watching its implementation in Karnataka and we hope that these results will encourage more States to follow suit,” said Vinod Giri, director general of BAI.The association said the growth in IMFL sales and tax receipts eased concerns that the new framework would hurt the spirits industry. It also suggested that consumers could be moving towards more expensive liquor products.Giri argued that the framework encouraged consumers to choose beverages with lower alcohol content while supporting govt revenues. However, the sales and tax figures cited in the release do not establish whether overall alcohol consumption or alcohol-related harm declined.BAI represents beer makers including AB InBev, Carlsberg and United Breweries.You use AI every day. Now get your AI Quotient. Take the AIQ test.