Karnataka: Beer prices set to rise by up to 20% from January 20

Beer prices in Bengaluru and across Karnataka are slated to increase by 10-20% starting January 20, 2025, following a state government notification finalizing the hike. This marks the third price rise within a year, affecting both mainstream and premium beer categories.

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The government’s decision stems from a draft amendment aiming to classify beer into three sub-categories with uniform excise duties. The move is intended to streamline taxation across beer brands, according to Excise Minister R.B. Thimmapur. However, no further policy adjustments have been announced.

The Beer Association of India (BAI), representing top brewers like United Breweries, AB InBev, and Carlsberg, has voiced strong opposition to the hike. In October 2024, the association urged the government to reconsider, warning that higher beer prices could reduce consumer demand and hurt the state's revenue. The BAI estimates the state could lose Rs 400 crore in tax revenue from the beer segment alone.

The association also cautioned that the price surge might jeopardize investments of Rs 5,000 crore across 10 breweries in Karnataka. Reduced beer consumption could harm manufacturing, trade, and the hospitality sector, potentially deterring future investments in the state.

As consumers brace for higher prices, concerns over the long-term economic impact on Karnataka’s beer industry continue to grow.