Bengaluru Beer Prices to Rise by Up to 20% Starting January 20

Beer prices across Karnataka, including Bengaluru, are set to rise by 10-20 per cent as the state government finalizes its notification on the price hike. This marks the third increase in beer prices within a year, impacting both mainstream and premium beer categories. The revised rates will take effect on January 20, 2025, as per the notification issued by the state government.

The price adjustment follows a proposed draft amendment that categorizes beer into three sub-groups, applying uniform excise duties to each category. The state government aims to standardize taxation across beer brands through this amendment. However, no additional policy changes have been announced, according to Excise Minister R.B. Thimmapur.

The Beer Association of India (BAI), representing major brewers such as United Breweries, AB InBev, and Carlsberg, has raised concerns over the price hike. In October 2024, the association urged the government to reconsider the draft notification, arguing that higher prices would negatively impact consumers and the business environment in Karnataka.

In its letter to the state government, the BAI warned that the increase in maximum retail price (MRP) could lead to reduced beer consumption, potentially affecting the state's tax revenue. The association estimates a revenue loss of Rs 400 crore from the beer category if the proposal is implemented.

The BAI also highlighted potential risks to the brewing industry in Karnataka. Investments worth Rs 5,000 crore across 10 breweries in the state could be jeopardized, the association claimed. It further cautioned that future investments in Karnataka might be deterred, impacting manufacturing, trade, and the hospitality sector.

"Elevated prices will likely suppress demand, reduce production activity, and harm related industries," the BAI stated in its communication to the government.