Excise duty hike likely to impact liquor sales in DK

Mangaluru:The proposed excise duty hike will make it even harder for the coastal district to meet its already weak liquor sales targets. Bar, restaurant, and liquor outlet owners express concern that recurring price hikes may drive away patrons and affect their profit margins.
The hospitality sector is particularly worried about declining customer footfall, resulting in revenue falling, given the already high liquor prices and service charges. The price increase is also expected to significantly reduce cross-border sales, particularly affecting transactions with neighbouring Kerala, in border regions.
Vadi Shenoy of Tandoor Bar and Restaurant said the post-Covid trend of people drinking at home or occasionally outside is continuing. With the upcoming hike in excise duty, the price of liquor and beer will increase. For instance, if a beer currently costs Rs 180 on MRP, it will be charged Rs 20 more, and restaurants also add their service charges. He said that the beer alone saw several price hikes due to excise duty increases in the last two years, putting a strain on customers and restaurants.
The region is already witnessing a decline in Indian-made foreign liquor sales. Additionally, the good sales of liquor that occur along the Karnataka-Kerala border will also see a decline. Ramesh D Nayak of Rathna's Wine Gate said that after the previous excise duty hike, a brandy brand popular among Keralites saw a Rs 100 increase for a full bottle, and this price is expected to rise again. People from border areas used to visit liquor shops in Karnataka because the prices were cheaper, however, now, they are higher than the ones available in Kerala, and this will surely impact sales, he said.
The liquor vendors also blame the govt for hiking excise duty on mid-segment liquor brands while reducing prices of premium brands. "It should have been the other way round. The state govt must reconsider its decision and halt any decision to hike the price. We from Dakshina Kannada are also taking a hit in business time and again, due to the ban on liquor whenever there are untoward incidents in the region," said a vendor,
Sources from the excise department in Mangaluru division said that while they met the 2023-24 target this financial year, they have fallen short of the 2024-25 target. This shortfall is attributed to a slowdown in fishing activities, curbs on illegal sand mining, and other key business activities.