City's most-preferred alcoholic drink to cost at least Rs 5 more a bottle from Oct as excise duty to rise 20%
You may soon have to downsize your order from a pitcher to a pint. The state excise department has finally decided to act upon its decision of increasing excise duty on beer by 10 to 20 per cent on the retail price.
A domino effect of this will be felt by consumers, as prices of beer are expected to go up by at least Rs 5 per bottle (650 ml) by October.
Since the excise department saw a rise in beer sales in the city in 2009-10, it has been contemplating an increase in the duty.
But it's the whopping annual revenue target of Rs 6,000 crore set this year that has pushed them to increase the duty on beer, say insiders.
For example, if a 650 ml bottle of mild beer costs Rs 75, with a 10 per cent increase in excise duty it will cost Rs 7.5 to Rs 8 more and with a 20 per cent rise in duty the bottle will be available for Rs 89 (approx).
A strong beer, the average price of which is Rs 85, will cost Rs 94 and Rs 102 (approx) if the excise duty increases by 10 per cent and 20 per cent respectively.
"We had plans of increasing the prices of beer last April, as there was a sudden rise in beer sales and revenue earned by the state compared to 2008.
However, this was under consideration. Now, that the new revenue targets have been given, officials are planning to increase excise duty by 20 per cent from next month," said an official from the state excise department, requesting anonymity.
According to sources within the department, the revenue collected from beer in the financial year 2009-2010 amounts to an approximate Rs 700 crore. That's Rs 300 crore more than the money the beverage generated in 2008.
No cheer
It comes as no surprise that the increase in excise duty has not gone down well with those in the alcohol business. They feel this will see a drop in sales.
"The department needs to understand that any hike in duty will be passed on to consumers. Beer today has monopoly in the market and if beer prices are hiked, sale of beer will automatically drop.
Tipplers may shift to other hard drinks which are available at a similar price," said Sham Matai, vice-president, Maharashtra Wine Merchants' Association (MWMA).
"It's absolutely wrong on the part of excise officials to increase duty on beer.
They first need to do away with the 25 per cent tax on alcohol and then think of increasing prices," said Dipinder Sachdeva, owner of a pub in Khar.
"An hike in prices will force the young guzzlers to shift to other options. We too have no choice but to pass on the burden to customers."
Low spirits
This has dampened the spirit of guzzlers as well. "Twenty five per cent VAT is pinching our pockets and the hike will add to our woes. What's the government thinking?" asked Manish Arora, a Bandra resident.
"The government should think of making beer cheaper as beer is consumed by the young. But all they care about is their revenue," added Tejas Shah, a businessman.
Number Game
52.6
%age of tipplers in city who go for beer
47.3
%age of drinkers in city who prefer distilled spirits
0.1
%age of tipplers in city who consume wine
Did you know?
Growth in sale of fermented beer in city was 30% in 2009 over the previous year, with additional 11% rise in sale of mild beer. Besides the state, the fastest growing beer markets are in Karnataka, TN, Andhra and Goa | 
