The excise department of the Karnataka government recently announced a reduction in the prices of mild and lager beers by at least 20-25 percent with effect from May 11. The new price list was introduced as part of the Alcohol in Beverage (AiB) policy for beers and spirits.
Media reports on Friday said the maximum retail price (MRP) of beers with 5 per cent alcohol by volume has fallen by 20-25 per cent under the AiB policy.
Starting May 11, the state government replaced its decades-old system based on volumetric liters with a new model that calculates prices based on the percentage of alcohol in drinks. According to a report in the Deccan Herald, Karnataka has become the first state in the country to adopt this model.
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The move will have a knock-on effect, making cheaper liquor more expensive while also cutting prices of premium brands by at least 20 to 25 percent.
Here’s what will change for liquor lovers in Karnataka
As per the new price list, there has been a reduction in the MRP of 650ml bottles of some of the most popular 5% v/v non-alcoholic beer brands including Kingfisher Premium, Kingfisher Ultra, Budweiser, UB Export and Heineken. ₹75 (KF Premium, Ultra), ₹70 (Heineken), ₹25 (UB Export) a ₹20 (Budweiser Premium).
The Excise Department also announced a price cut for premium Scotch whiskey of at least 20 percent. MRP of 750ml bottles of Black Label (43 per cent alcohol v/v) and Chivas Regal (40 per cent alcohol v/v) reduced from ₹5,190 to ₹4,100.
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Additionally, the prices of Indian cheaper liquors (IMLs), particularly the popular 180ml tetra packs of whisky, rum, brandy, gin and vodka, will rise by 20-30 per cent under the new excise duty policy.
Premium and foreign brands of spirits are likely to become cheaper. The liquor, produced by multinationals such as Diageo, Pernod Ricard and United Spirits, is expected to see a 16-20 percent price cut.
Impact of price change on consumer plates
The price change is expected to have the biggest impact on lower- and middle-income consumers.
According to The New Indian Express, the top five slabs account for 75-80 percent of excise revenue. The new MRP of popular rum brand Old Monk with 42.8 percent alcohol v/v has been revised from ₹765 to ₹850. The old monk falls under the fifth slab of excise duty.
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According to media reports, officials said additional excise duty on products falling under slabs six to eight has been reduced by nearly 10-15 percent, benefiting the high-end liquor category mostly preferred by affluent consumers.
The final new MRP is not out yet
Quoting industry experts, The New Indian Express said, “The final new MRP list of all brands is still not out. Though the new MRP came into effect on May 11, people are still not aware of the new prices. We will have to wait and watch the market reaction.”
Additionally, the Karnataka government has reduced the number of consumption boards used to classify liquor under MRP from 16 to 8.
On 8 May, the government led by Chief Minister Siddaramaiah issued the final notification of the new tax policy through the Karnataka Excise (Excise and Duties) (2nd Amendment) Rules, 2026. Karnataka is the first state in India to introduce an AiB tax policy. AiB refers to the alcohol content or volume per liter of a liquor such as brandy, whiskey, gin, rum, beer, wine, fruit wine and fortified wine.
The Karnataka Breweries and Distilleries Association is concerned
The Karnataka Brewers and Distillers Association (KBDA) has expressed concern over the steep hike in additional excise duty on liquor in the first five slabs. Industry representatives indicated the price of a quarter bottle, which was previously around ₹63 and later rose to ₹80 after previous revisions can now increase to almost ₹105 in the new tax regime.
The new policy has also drawn criticism from local manufacturers and industry bodies, who say the tax burden has fallen disproportionately on budget liquor, which contributes nearly 70-75 percent of Karnataka’s excise revenue.
The KBDA also warned that while multinationals may be able to absorb market fluctuations, several small and regional spirits producers dependent on cheap products could face severe financial stress and possible closure due to declining sales.
