Beer sales in Karnataka contracting due to high taxes, bringing down tax revenues in state: BAI

Brewers' Association of India (BAI) said in a letter to the state government.
Taxes on beer have been increased three times in the last 18 months — in July 2023, February 2024, and January 2025, and as a result, the growth in sales of beer in the state, which has always been healthy, has «slumped to stagnation», it said.
«After the third tax increase in January 2025, beer sales have actually started contracting for the first time,» said a letter by BAI Director-General Vinod Giri.

BAI is the apex body of the beer industry representing India's largest beer makers such as United Breweries (owned by Heineken, AB InBev, and Carlsberg, which together account for 85 per cent of the beer sold in India.
«We are at pains to point out that frequent increases in taxes in recent times have taken away growth from the beer industry, put massive investments made by the industry in the state at risk, and have also brought down government tax revenues,» it said.

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In February last year, Karnataka increased the additional excise duty on beer from 185 per cent to 195 per cent. Later in January 2025, the excise duty was increased Rs 10 per bulk litre, or Rs 78 per case, on most of the beer sold in the state.
«Further, the negative impact of tax increases on sales is getting worse with every increase. After the third tax increase in January 2025 beer sales have started contracting for the first time,» it said.
Moreover, it will also force consumers to shift to cheaper options, leading to a revenue loss for the