The recent hike in the excise duty by the Maharashtra government will push the IMFL whisky MRP by about 85 per cent, which will lead to a significant drop in sales volumes, industry body CIABC has said.
Expressing concerns over the recent Maharashtra Cabinet decision to hike excise duty on Indian Made Foreign Liquor (IMFL), CIABC said it could severely disrupt the market, erode the competitiveness of national brands, and jeopardise the availability of legitimate alcoholic beverages in the state.
Moreover, the government's decision to not increase the excise duty on Beer would create an "uneven playing field" in the alchoBev market, CIABC said, urging the state government to rethink and reconsider the hike, which may trigger serious consequences.
This will also lead to downtrading in the state, compelling a shift toward lower-category products, CIABC said, adding that "if implemented in toto, will have far-reaching adverse impact".
On Tuesday, the Maharashtra government decided to increase the excise duty on IMFL and country liquor. Now, IMFL will be subject to an excise duty that is 4.5 times the manufacturing cost.
However, the state government has not decided to increase excise duty on beer, a move criticised by several alcohol beverage players.
CIABC further said the IMFL industry contributes approximately 60 per cent of the total Excise Revenue of the state.
Questioning the rationale for not increasing excise duty on beer, CIABC said the excise Duty collected from a single case of IMFL is equivalent to that from four cases of beer, underscoring the critical importance of this category.
"Furthermore, duty increase on IMFL, without corresponding changes for a category, such as beer, will create an uneven playing field and distort category dynamics, leading to possible adverse impact on revenue.
On Tuesday, the Maharashtra government decided to increase the excise duty on IMFL and country liquor. Now, IMFL will be subject to an excise duty that is 4.5 times the manufacturing cost.
However, the state government has not decided to increase excise duty on beer, a move criticised by several alcohol beverage players.
CIABC further said the IMFL industry contributes approximately 60 per cent of the total Excise Revenue of the state.
Questioning the rationale for not increasing excise duty on beer, CIABC said the excise Duty collected from a single case of IMFL is equivalent to that from four cases of beer, underscoring the critical importance of this category.
"Furthermore, duty increase on IMFL, without corresponding changes for a category, such as beer, will create an uneven playing field and distort category dynamics, leading to possible adverse impact on revenue.
On Tuesday, the Maharashtra government decided to increase the excise duty on IMFL and country liquor. Now, IMFL will be subject to an excise duty that is 4.5 times the manufacturing cost.
However, the state government has not decided to increase excise duty on beer, a move criticised by several alcohol beverage players.
CIABC further said the IMFL industry contributes approximately 60 per cent of the total Excise Revenue of the state.
Questioning the rationale for not increasing excise duty on beer, CIABC said the excise Duty collected from a single case of IMFL is equivalent to that from four cases of beer, underscoring the critical importance of this category.
"Furthermore, duty increase on IMFL, without corresponding changes for a category, such as beer, will create an uneven playing field and distort category dynamics, leading to possible adverse impact on revenue.
