Following the Telangana government’s recent approval of increased supply fees for beer companies, manufacturers of Indian-made foreign liquor (IMFL) are now advocating for a similar price adjustment. This development presents a delicate situation for the Congress-led state government, as any decision to raise liquor prices could directly affect consumers and potentially lead to public discontent.
In 2023, the previous Bharat Rashtra Samithi (BRS) administration sanctioned an average 10% price hike across various liquor categories. With escalating production costs, IMFL companies are now seeking a comparable adjustment. However, the government must balance industry concerns with the potential financial impact on consumers.
Industry representatives have reportedly engaged with officials from the excise department to press for the price revision. During these discussions, government officials inquired about the necessity of the hike and the specific liquor categories affected. Industry leaders argue that increasing manufacturing expenses, coupled with stagnant supply rates, have made sustaining operations increasingly challenging.
Since the formation of Telangana, liquor prices have been increased four times—in 2015, 2017, 2020, and 2023—with the most significant hike of 10% implemented last year. A company representative explained that for every ₹100 earned from a bottle, the liquor supply company retains only ₹17, with the remaining amount allocated to the government as taxes and fees.
Telangana remains one of India’s largest liquor markets, offering approximately 180 different brands. Whiskey dominates the sector, with nearly 3.5 million cases of IMFL sold each month, primarily in 350 ml and 750 ml bottles. The state generates ₹3,000 crore monthly from beer and liquor sales, with beer alone contributing nearly 25% of the revenue.
Despite earlier proposals to discourage beer consumption due to its lower tax revenue compared to hard liquor, Telangana continues to be the country’s largest beer market. With both beer and IMFL companies seeking price adjustments, the government now faces a key policy decision that could have wide-ranging economic and political implications.
