The recent increase in excise duty on Indian Made Foreign Liquor (IMFL) by over 50–60% in Maharashtra is not merely a steep hike, but a long-overdue correction, according to Vinod Giri, Director General of the Brewers Association of India.
Giri explained that although the hike may seem substantial, it is part of a long-pending tax restructuring. “It appears large because it’s happening after a long time… this is more like a tax reform,” he told CNBC-TV18, noting that taxes on beer have been raised regularly over the years, while IMFL had largely remained untouched.
In the last 10 years, beer taxes have risen by 32%, while IMFL duties increased by just 9%. This imbalance made beer more expensive than spirits—an unusual scenario for a moderate alcoholic beverage. Giri stated that globally, governments typically keep beer taxes lower, but in Maharashtra, that pattern was reversed until now.
The new pricing could impact liquor demand temporarily, but Giri believes the market will settle soon. “The market will maintain its normal healthy course,” he said, adding that IMFL’s exceptionally high 7% compound annual growth rate (CAGR) over the past decade in Maharashtra is likely to come down to more realistic levels, in line with the national average of about 3%.
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Meanwhile, the beer segment, which has remained flat with only 1% CAGR over the same period, is expected to see a revival. Giri anticipates growth in beer sales to return to the national trend of around 9–10%, supported by the now narrower price gap with spirits.
The state government has also introduced a new grain-based liquor category—‘Maharashtra Made Liquor’—positioned between country liquor and IMFL. This, Giri said, could carve out a 10–20% market share and improve product quality, ultimately increasing revenue.
The government is targeting ₹14,000 crore in additional revenue from this comprehensive tax overhaul. On the cost side, raw material prices—especially barley and glass—have started to stabilise after global disruptions, which could help improve margins for brewers.
Also Read: Liquor prices rise in Maharashtra as state cabinet hikes excise duty
For the full interview, watch the accompanying video
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