Beer consumption in Maharashtra on a slow recovery amid high taxation

The industry says that taxation on beer in the state has made it more expensive than other alcoholic beverages

Beer consumption in Maharashtra has just about reached pre-Covid levels while hard spirits have grown at a faster pace.

 

Taxation on beer has made it more expensive in Maharashtra compared to other states.

 

“Over the last decade or so, beer sales have stagnated in Maharashtra with a compound annual growth rate (CAGR) of just 1 per cent. This is very odd because during the same time liquor sales have grown by 6 per cent CAGR. The root cause of this lies in over taxation on beer. This has made it very expensive,” director general at Brewers Association of India told Business Standard.

 

He said that in the last decade, excise duty on beer has gone up by 34 per cent while it has only gone up by 9 per cent for Indian made foreign liquor (IMFL),” Giri added.

 

Excise duty on strong beer has seen change thrice since FY11 and it was twice in the case of mild beer.

 

According to industry experts, the hike in excise duty in the state has led to a fall in beer consumption.

 

Carlsberg India also said the brewing industry in Maharashtra has seen its growth slow due to taxation disparities.

 

“A balanced tax policy could drive responsible choices, support local agriculture, and create a fair market. A progressive approach can help Maharashtra regain its competitive edge in this market,” Rishi Chawla, vice-president, corporate affairs at Carlsberg India said.

 

He added, “Despite the sector's past leadership, the industry’s growth has slowed due to taxation disparities. Beer, with its lower alcohol content, encourages moderation, yet is disproportionately taxed compared to stronger alcoholic beverages/hard spirits.”

 

According to data from the industry, consumption of beer in Maharashtra has dropped to the third place among major states. In FY13, Maharashtra was the leading consumer of beer.