‘India to be exciting beer market in 3-5 years’
alcohol by volume" and not “strength". So, if beers are between 3-8% alcohol by volume, they are taxed per bottle and not on the amount of alcohol in them. Barring West Bengal, no other state is following this.
The state introduced slab-based taxation on beer post-pandemic, and the government saw a 9-18% increase in terms of revenues. This is an example of how when taxation on beer happens, there will be no reduction in the tax a state collects because more volumes will be sold. The absolute pole of revenue for the state has gone up.
While West Bengal serves as a very good template, we feel governments are being a bit more temperate because they don’t want to cross that threshold of earning more than a certain amount from excise on alcohol. From an industry and revenue standpoint, Karnataka has really come through for beer companies. We saw a positive impact from a steeper duty fee, which was imposed on spirits as compared to beers, something along the lines of 10% on beers and 20% on spirits.
Even Telangana is growing in the high single digits. The highlights have to be states like West Bengal, Karnataka, Uttar Pradesh, Odisha, Rajasthan, and Punjab in the first half of 2023. (The reporter was in Bengaluru on an invite from Ab InBev India)
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