‘Sakkath Hot’, The Mug Now Is: Beer Under Further Pressure As Karnataka CM Raises Excise Duties On The Drink

Karnataka Chief Minister HD Kumaraswamy has announced that the state will be doubling the Excise and Additional Excise Duty (AED) on beer; bottle, draught and artisanal. Consequently, beer and low alcoholic beverages will cost more from April 1.

Kumaraswamy, who also holds the finance portfolio, presented the second budget of the Congress- JD(S) coalition government on Friday (Feb 8).

The 2019-20 State Budget has pegged the revenue target for Excise Department for the financial year 2019-20 at Rs 20,950 crore as against Rs 19,750 crore for 2018-19.

The Budget sharply increased the AED on bottled beer from 150 per cent to 175 per cent. The AED on draught beer has gone up from 115 per cent to 150 per cent.

Excise duty on beer brewed in microbreweries has been scaled up from the existing Rs 5 per barrel litre (BL) to Rs 10 per BL and the AED has been increased from Rs 12.50 per BL to Rs 25 per BL.

Excise duty on low alcoholic beverages (eg. wine and breezers) has gone up from Rs 5 per BL to Rs 10 per BL and the AED on them has also been revised from the existing 122 per cent to 150 per cent.

The increased Excise and AEDs on beer would mean that a 500 ml mug of artisanal beer, which is priced between Rs 250 and Rs 275 in microbreweries, will now cost Rs 300 and odd.

Bengaluru alone has 49 microbreweries with more are in the pipeline. The move is likely to impact them and make beer drinking expensive. A microbrewery is a brewery which has an installed capacity of not more than thousand litres per day.