The Karnataka government has unveiled a new alcohol-in-beverage (AIB) excise policy that aims to decrease the price of alcohol, aligning it with neighbouring states, as per news reports.
However, this has not been met with enthusiasm from local distillers, who are apprehensive about its impact on smaller brands.
The state of Karnataka has adopted a groundbreaking alcohol excise policy that sets excise duties based on the alcohol content of beverages.
The government has deregulated the price fixation process, allowing producers to determine prices according to market dynamics.
The plan is designed to ensure that alcohol prices in Karnataka are comparable to those in Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, and Kerala.
Local distillers have expressed dissatisfaction with the new policy, fearing it may disproportionately benefit larger multinational brands at the expense of local ones.
Smaller distillers are concerned that the deregulation of pricing and reduction of liquor slabs from the Indian Made Liquor category will skew the market in favour of higher-end brands, potentially reducing their market share.
The Karnataka excise department has indicated that the policy aims to provide consumers with cheaper alcohol options while increasing state revenue.
By aligning prices with neighbouring states, they hope to lessen cross-border alcohol purchasing and boost local sales. The policy introduction makes Karnataka the first state in India to implement alcohol-in-beverage-based excise duty.
The Karnataka Brewers and Distillers Association, led by its president Arun Kumar Parasa, plans to continue discussions with the government to address industry concerns.
They argue that the policy design was finalised without adequately considering their input. The association represents thousands of workers in the alcobev sector seeking a fair balance between state revenue and industry health.
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Consumer reaction to the policy is mixed. While some welcome the prospect of reduced alcohol prices, the market remains divided over its long-term effect.
Critics argue that although consumers may enjoy lower costs in the short term, the industry's health is equally significant for sustained economic growth and employment in the region.
In summary, Karnataka's new excise policy aims to lower alcohol prices and harmonise taxes with neighbouring states, but it faces criticism from local distillers worried about the implications for their market share. While the government focuses on increased revenue and consumer benefit, the policy's full impact on the local alcohol industry remains to be seen.
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Published on: May 18, 2026, 10:33 AM IST
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