Beer sales unable to bear Maharashtra hike in excise duty


The soaring mercury this summer was not been able to check the steep fall in beer sales in the state.

As per the date available with the excise department, beer sales started plummeting in December 2017, and they never recovered. The summer — usually a “high-sales” season for beer — saw the figures dropping further. In comparison to sales during the same time last year, March 2018 recorded a 16% drop in beer sales, while February 2018 lagged behind February 2017 by 13%.
Beer sales unable to bear Maharashtra hike in excise dutySales had picked up in the city right after the highway liquor ban was lifted last year. However, soon after, they went into a nosedive. Sources in the liquor industry said the lifting of the ban was followed by a massive excise duty hike, which pushed beer sales to rock-bottom.

No new liquor company is currently willing to enter the Maharashtra market due to the continuous hikes in excise duties and archaic liquor laws, revealed a city-based retailer. “Earlier, Maharashtra used to account for nearly 40% of the revenue of a company with a national presence. That is no longer the case. Because of higher duties, the companies cannot sell their products at prices below a particular point. So there is no revenue generation. Production cost is also on the higher side and there are also these archaic rules pulling the industry down,” he said.

Another retailer said, “There has been a massive drop in sales at our store. The beer has become so expensive that people can no longer get the same kind of satisfaction. Customers have to pay anywhere between Rs 160 and Rs 200 for a 650ml bottle of beer. Just three years ago, it used to cost between Rs 100 and Rs 120. The prices went up in November last year due to excise duty revision. But at that time, not many felt the pinch because the shops then had just reopened after the liquor ban. Also, it was winter — a lean period for beer sales. However, even during the summer months, the sales continued to drop,” he said, adding that beer companies to have begun complaining about this.

That the customers have not taken the price hike was endorsed by another retailer. “The last excise duty hike did not go down well with the customers. Those who drink at resto-bars and permit rooms can still absorb such exorbitant hikes, but customers who buy their liquor to drink at home cannot afford to do so. The very reason they drink at home is that it is more economical,” he said.

The retailer added that after the hike, one can of a popular beer brand now costs Rs 161. Earlier, it sold for Rs 140. “Why would any customer pay an extra Rs 21 for something as small as a can of beer? Light beer drinkers now refrain from drinking, while strong drinkers have now switched to Indian Made Foreign Liquor (IMFL),” he said.