Karnataka faces massive increase in liquor prices post New Year celebrations; check details
By Vinaykumar Patil | First Published Jan 3, 2024, 9:13 AM ISTLiquor manufacturers in Karnataka hike prices of Bag Piper, Old Tavern, and 8 PM, causing outrage among consumers post-New Year celebrations. The surge, attributed to production costs, impacts lower-income segments. Despite government denial, price adjustments could lead to a potential shift in consumer preferences and concern among bar owners about declining sales.
Drinkers in Karnataka have been left in despair as liquor manufacturing companies have substantially increased the prices of three popular liquor brands—Bag Piper (BP), Old Tavern (OT), and 8 PM—commonly favoured by the lower-income segments, post the New Year celebrations.
Since January 1, the prices per case of BP, OT, and 8 PM have soared by over a thousand rupees, eliciting outrage from regular consumers. Surprisingly, the excise department has not initiated any rate hikes. Sources within the department have attributed the price surge to elevated production costs cited by the liquor manufacturing companies.
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The escalation in prices primarily impacts brands favoured by the lower economic strata, causing concern among bar owners who fear a potential decline in liquor sales due to consumer dissatisfaction. Conversely, there's speculation that drinkers might switch to more affordably priced alternatives if discontent persists.
The price alterations across different regions include an increase in MRP at outlets for 180 ml OT and 8 PM—from Rs 100 to Rs 123 and from Rs 123 to Rs 159 for BPU. This increase will also be reflected in bars, restaurants, and wine stores, varying as per respective localities.
Reportedly, liquor companies had previously sought approval from the Excise Department for a price hike, and subsequently received permission for the same. Once authorized, the new rates will be conveyed to the Karnataka State Beverage Corporation (KSBCL). Subsequently, KSBCL will adjust the prices and supply the revised-priced liquor to suppliers, including bars, restaurants, and wine stores. Anticipating this surge, some have already bulk-purchased these brands from the corporation.
The sources state that the government has not orchestrated any price hikes. Excise Minister R.B. Thimmapura clarified that the state government neither increased liquor prices nor augmented taxes. Instead, the surge in prices stems from the decisions made by the liquor manufacturers.
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In a significant shift, the liquor companies have moved OT and 8 PM from the 3rd to the 4th price slab, comprising 18 slabs corresponding to quality. Bangalore Liquor Association President Lokesh highlighted that BP, initially in the 4th slab, has now transitioned to the 5th position.
Addressing reporters, Lokesh emphasized the manufacturers' decision to increase prices, implying that before any tax increments, the government informs them about pricing, suggesting the manufacturers' independent pricing actions. However, he reiterated the obligation to pay taxes to the government and expressed expectations of heightened revenue without any specific tax collection targets set.
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