Bengaluru pubs considering beer kegs to boost sales
The proposed 20% increase in Additional Excise Duty (AED) on alcohol could raise the price of a 650ml beer bottle to around Rs 180.
Bengaluru may soon permit the sale of beer in kegs from local pubs. The Karnataka excise department has proposed a plan that could allow independent pubs to sell beer from kegs as a way of boosting revenue.
With a recently proposed 20% increase in Additional Excise Duty (AED) on alcohol, the price of a 650ml beer bottle could soar to roughly Rs 180, trailing closely with prices in Tamil Nadu (Rs 210) and Delhi (Rs 190). Despite the higher costs of premium branded liquor, Karnataka’s excise department has been planning new strategies to increase sales of alcohol, primarily. The potential decision to facilitate the sale of beer in kegs at independent pubs is just one such initiative.
The Details of the Beer Keg Proposal
According to the proposed plan, independent pubs will be allowed to sell beer from a single brand through kegs to their consumers. A keg, typically a stainless-steel barrel, can store beer or other alcoholic drinks in quantities ranging from 5 to 10 liters. However, it’s important to note that under this plan, craft beer companies will be restricted to keg sales and cannot sell their in bottles.
“The beer companies or craft companies cannot bottle their and sell them; only kegs ranging from 5 to 30 litres may be allowed. This is another innovative way of trying to increase beer sales,” said a top-level official of the excise department. “A pub will be allowed to sell kegs of only one brand from one outlet after gaining necessary licences/permissions from the department.”
Karnataka’s Current Excise Structure
Presently, Karnataka classifies alcohol brands into 18 categories based on the manufacturers’ selling price to the Karnataka State Beverage Corporation Ltd (KSBCL), which is a governmental wholesaler.
Despite the state’s premium brands and Indian Made Liquor (IML) being among the most expensive in the country, it appears that the low and medium-priced brands (which constitute the lowest four of the 18 liquor category slabs) remain favored with the majority of consumers.
“We have 18 slabs of liquor categories, and the lowest four slabs are the ones that are consumed the most. They are also the lowest priced in the country. It’s only the premium brands and IML that are expensive, but a substantial 75 per cent of consumers choose the low and medium-level brands. The demand for premium liquor brands has also been increasing steadily,” said a senior excise official who did not wish to be named.
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