Kingfisher will absorb tax hikes ‘to keep beer affordable’ in Karnataka, says UBL

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Kingfisher will absorb tax hikes ‘to keep beer affordable’ in Karnataka, says UBL


City-based United Breweries Limited (UBL), the makers of Kingfisher beer, on Wednesday said it won’t increase beer prices despite three consecutive hikes in excise duty in the last 18 months by the Karnataka government.

The decision was aimed at “preserving affordability and fostering continued consumer trust”, said Vivek Gupta, Managing Director and CEO of UBL.

The State government recently notified a fresh hike in excise duty on beer and the same came into effect on January 20. The duty revision took the price of the cheapest beer sold in the State from about ₹120 per bottle to about ₹145.

Meanwhile, reacting strongly to the State’s decision to further hike excise duty on beers, Vinod Giri, Director General of the Brewers’ Association of India said, “This is the third tax increase in the State on beer within one and half years which is unprecedented anywhere in country.’‘

According to Mr. Giri, the beer industry is already reeling under pressure ever since the taxes were reduced or held on Indian Made Foreign Liquor (IMFL) in September. As a result beer, which was growing by 12% until September last year has fallen by over 10% in the period October onwards. Now the excise duty has been doubled to ₹10 per bulk litre on beer which will lead to consumer prices touching ₹00 a bottle for popular beers.

‘’This would clean out any hopes of recovery in beer sales. Tax reductions on IMFL and tax increases on beer will just shift consumers from low alcohol beer to hard liquor,” he claimed.

The State has increased excise duty and additional excise duty by almost 60% taking the cost of the affordable segment of beer, which constitutes over 50% of the entire beer industry, as per industry observers. “There is no duty increase on premium beers on spirits. So, all MNCs seem to benefit from this lopsided taxation on beer in Karnataka,’‘ claimed an industry veteran.

Under the revised duty regime, the prices of “common man’s beer brands” he said, will go up by ₹25 to ₹50 per bottle of 650 ml. However, UBL has claimed that it would absorb a significant portion of the added duties, to ensure its flagship brands remained unaffected.



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