Karnataka faces fall in alcohol sale after government hikes prices

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On Monday, due to relaxation in the lockdown rules liquor shops were opened in many parts of India, inviting bumper queues and business. The alcohol sale had been put to an end in the month of March so that to slow down the effect of the coronavirus. And finally after more than 40 days of lockdown, the Karnataka government agreed to resume sales from May 4 but only permitted about4,500 standalone liquor stores to sell whereas bars, restaurants, etc will continue to be shut to ensure social distancing is maintained.


The stats on Monday showed that it had sold alcohol worth Rs 45 crore. On Tuesday the sales rose to Rs 197 crore and on Wednesday it touched Rs 232 crore.


On Wednesday, Chief Minister B S Yediyurappa said that a Rs 1,610 crore Covid-19 relief package would be primarily funded by a hike of 11% in excise tax. This was on top of the 6% hike which was announced in the budget presented in March indicating a cumulative 17% hike in retail prices.


Excise Department officials said “The lockdown has been in place for more than a month. On Monday, shop owners sold the old stock. From Tuesday, they will get fresh supply of liquor with revised price tag. The State Budget for the current financial year had proposed a 6% increase in the price of IML. The price of beer will remain unchanged,” an official.

The Excise Commissioner, in a press release, said that on Monday, 3.9 lakh litres of beer and 8.5 lakh litres of IML were sold, generating ₹45 crores in revenue.


According to officials of Karnataka State Beverages Corporation Ltd, alcohol worth Rs 165 crore were sold on Thursday compared to Rs 232 crore of sale on Wednesday before the price hike, that means sale of alcohol resumed in Karnataka, the state witnessed a sharp decline in sales after the government hiked retail prices.

In 2019-20 the state had mopped up Rs 19,701 crore of revenue from the sale of liquor (till February as the budget was presented on March 5). The revenue target from sale of alcohol this year is Rs 22,700 crore.


West Bengal, Karnataka, Uttar Pradesh, Rajasthan and Uttarakhand and other states on Wednesday reported up to 20% higher excise revenue than normal days. As a result, lesser people were seen at liquor shops in these states.