New 'Alcohol in Beverage' Policy Slashes Premium Rates by 25 Per cent
Bengaluru: The Karnataka government has rolled out a major transformation in the state’s liquor taxation system with the implementation of the new Alcohol in Beverage (AiB) policy, triggering sharp price cuts for premium beer and imported Scotch whiskies while increasing rates for cheaper liquor consumed by the mass market.
The new policy, which came into effect on May 11 through the Karnataka Excise Department, replaces the state’s decades-old taxation model and introduces a modern alcohol-volume-based taxation structure. Karnataka has now become the first state in India to adopt the AiB system, a move officials say is aimed at simplifying taxation, boosting premium alcohol sales and aligning liquor pricing with international standards.
Under the revised structure, the government has reduced the existing 16 excise tax slabs to just 8, with taxes now being calculated primarily on alcohol concentration instead of fixed pricing categories.
Premium Beer Prices Reduced by Up to 25 Per cent
The immediate impact of the policy is visible across liquor outlets in Bengaluru and other parts of Karnataka, where prices of premium beer brands have dropped significantly.
Popular 650 ml beer bottles such as Kingfisher Premium and Kingfisher Ultra are now cheaper by nearly ₹75 per bottle. International beer brand Heineken has reportedly become cheaper by around ₹70, while Budweiser Premium and UB Export have seen price reductions ranging between ₹20 and ₹25.
Industry insiders say the revised taxation system particularly benefits mild and lager beers containing around 5 percent alcohol content, resulting in price reductions of nearly 20 to 25 percent.
Imported Scotch Whiskies Witness Massive Price Cuts
The biggest relief under the new policy has come for consumers of imported Scotch whiskies and luxury liquor brands.
Premium foreign whisky labels including Black Label and Chivas Regal, which were earlier priced at around ₹5,190 for a 750 ml bottle, are now retailing at nearly ₹4,100. The reduction of almost ₹1,100 per bottle is being seen as one of the largest liquor price corrections in Karnataka in recent years.
Experts believe the price rationalisation could reduce illegal inflow and transport of premium liquor from neighbouring states such as Goa, where imported spirits were traditionally cheaper.
“By moving to a volume-based alcohol tax, we are ensuring a fairer system that discourages high-concentration alcohol consumption while making global brands accessible to residents,” an Excise Department official stated.
Low-Cost Liquor Prices Increase Under Revised Tax Structure
While premium liquor consumers are benefiting from reduced rates, the new AiB policy has increased prices for several low-cost alcohol brands commonly consumed by daily wage earners and low-income groups.
Officials maintain that the revised taxation model imposes taxes more proportionally based on actual alcohol volume, but the price hike for economical liquor categories has already sparked public debate and criticism from some sections.
According to excise officials, the government expects the increase in premium liquor sales volume to compensate for revenue adjustments caused by reduced pricing.
Government Eyes Revenue Growth and Tourism Boost
The Karnataka government also believes the AiB policy could strengthen Bengaluru’s hospitality, nightlife and tourism sectors by making premium alcohol more competitively priced compared to other metro cities.
Industry experts suggest the revised pricing may encourage higher spending in pubs, restaurants and luxury hotels, potentially increasing excise revenue through greater consumption and tourism activity.
The government is expected to closely monitor the impact of the policy over the coming months as Karnataka enters a new era of alcohol taxation reform.
