The sale of beer in Karnataka has taken a huge hit this financial year, as it has plummeted by a whopping 33.58% in comparison to the corresponding period of the last financial year. A major reason attributed to the steep drop is lockdown during April and May, the peak consumption period.
A steep excise duty hike has also contributed to decline in sales. While 192.67 lakh carton boxes (CB) were sold last year between April and November, it is down to 127.97 lakh CBs.
The sale of Indian-made liqour (IML) has not seen such a steep drop though sales has declined. While a total of 400.86 lakh CBs of IML were sold last year, it declined by 11.19% to 356 lakh CBs this year.
To increase revenue, the cash-strapped government increased the excise duty on IML.
It had been hiked from 17% to 25% in various slabs, which also included a 6% excise duty hike announced earlier in the budget. The additional hike that came to effect in May was expected to mop up an additional revenue of ₹2,350 crore as against an estimated loss of about ₹2,500 crore due to shutdown. In April this year, just about ₹ 1.06 crore was collected when compared to ₹1,302 crore last year. Overall, the revenue collection has come down by 4.25% of ₹ 612 crore compared to last year. So far, excise duty collection till November is ₹13,778 crore.
While beer sales drew a blank in April due to lockdown, just about 12.29 lakh CBs were sold this May as against 31.59 lakh CBs last May. Between June and October, beer sales has clocked lesser than the corresponding period last year. Only in November, the sales has been higher compared to the last year.
The Federation of Wine Merchants’ Association, Karnataka, has said that the decline in revenue and sales was owing to the steep hike in May.
“Bars have not shown improvement in sales, and footfall has not increased. In times of pandemic, a steep hike does not augur well. Despite repeated requests to government to reduce excise duty, it is in no mood to do so,” federation’s general secretary Govindraj Hegde said.
He said that bars that clock high beer sales started operating much later, which is also a reason for the low sales.
