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Impending liquor price hike to generate Rs. 7,000 cr revenue 

The liquor price in Telangana is set to rise significantly, with an expected increase of approximately Rs. 20 on beer and Rs. 30-50 on liquor bottles. The Revanth Reddy government has decided to increase payments to breweries by 10-15%, and it’s anticipated that alcohol prices will increase by 20-25%, which will be passed entirely onto consumers.

In comparison, the BRS government, during its nine-and-a-half-year term, revised liquor prices only twice, even lowering the prices of several brands on one occasion. However, the new Congress government, facing financial strain to fund welfare programs, now appears to be turning to alcohol price hikes as a revenue source.

Telangana’s six breweries produce around 88 crore liters of beer annually. Telangana State Beverages Corporation Limited purchases this beer and supplies it to liquor stores. Currently, the Beverages Corporation pays Rs. 289 for a case of 12 light beers and Rs. 313 for a case of strong beer, and sells each case to liquor shops at Rs. 1,400, including handling fees. This markup sees each case retailing for around Rs. 1,800, bringing the cost of a bottle of beer, which breweries sell for Rs. 24, to about Rs. 150 for consumers.

Breweries have been urging the Excise Committee for a 20-25% price hike due to escalating operational and raw material costs, as there has been no price increase since 2021. Although the breweries requested an increase of Rs. 450 per case, the Beverages Corporation is leaning towards a 10-15% price increase, which would still translate to a 20-25% price hike for consumers.

The price hike decision is now finalized, with implementation expected by mid-December. Facing financial challenges, the government has tasked various departments with increasing revenue, and Deputy CM Bhatti Vikramarka recently discussed the impending liquor price increase at a meeting. This adjustment is projected to generate an additional Rs. 7,000 crore for the state treasury.