Super-premium liquor to become cheaper in Karnataka

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Bengaluru: Super-premium liquor is going to get cheaper in Karnataka, the largest market for all liquor consumption including brands in this category, following a  reduction in excise duties.

A 750ml bottle of Johnnie Walker Black Label scotch whisky from Diageo-United Spirits Ltd, for instance, will now cost around Rs4,872.

That’s about Rs2,110 less than the earlier MRP of Rs6,984. Other brands that come in a similar price range, like Pernod Ricard SA’s Chivas Regal 12-year old blended scotch whisky, could also cost roughly a couple of thousand rupees less than before.

Karnataka is the largest market for liquor consumption in India, including super-premium brands, by both volume and value sales.

But, it is also one of the costliest markets for super-premium brands. The duty cut will bring prices of these brands more on par with other states, a senior official in the excise department said on condition of anonymity.

Brands that cost Rs1,000 and above per 750ml bottle are typically regarded as premium, while those that cost Rs3,500 and more fall under super-premium.

“The prices of mainly single malts will come down. This might give us a sort of minor boost in volumes. We have to wait and watch,” said Rakshit Jagdale, executive director of boutique single malt maker Amrut Distilleries Pvt. Ltd.

Amrut Fusion, one of the company’s single malt variants, will now retail at about Rs3,000 per 750ml bottle, roughly Rs600 lower than its earlier MRP.

The state originally had 17 duty brackets, with the highest bracket attracting an additional 21% duty on the price manufacturers declared for a case of liquor, over and above the basic excise duty. Each case can contain either 8.64 or 9 or 12 bulk litres of liquor, according to the excise department’s definition.

On 3 January, the department created a new 18th bracket for brands that cost Rs15,001 and above per case and decided to levy a flat Rs3,000 additional excise duty on these. It also changed the way it levies duties on the 17th slab—brands that cost between Rs7,651 to Rs15,000 per case—to a flat Rs2,000 additional duty rather than 21% on the declared price.

While these changes took effect on 3 January, it will take some time for consumers to see the new prices reflected on the retail shelves. The process involves discussions between individual companies and distributors or retailers, and a labelling change to reflect the new MRPs.

“Premium liquor products across the country were comparatively lower in prices than in Karnataka. But the restructuring of duty has helped rationalise prices in Karnataka and has brought them on par with that of other states. We believe this change will benefit the consumption pattern,” said a spokesperson at single-malt maker John Distilleries Pvt. Ltd in an email response.

Premium and super-premium products are currently more affordable in states like Maharashtra, the second-largest market for liquor on a volume and value basis.

For instance, a 750ml bottle of Johnnie Walker Black Label costs roughly about Rs5,000 in Maharashtra. Karnataka’s move will, indeed, bring prices in the state on par with others. Whether it does lend a fillip to volume growth at firms and, in turn, fetch the state more revenues remains to be seen.livemint