If you thought drinking in Bengaluru was pricey, get ready to pay even more. Karnataka is hiking liquor prices again, turning a night out into a luxury. With excise duties rising faster than beer foam, your bar tab might need a budget of its own. So before drowning your sorrows, check your bank balance first!
Chief Minister Siddaramaiah, in his Budget 2025-26 presentation, announced plans to align liquor prices with those of neighbouring states, citing the need to boost excise revenue. With an ambitious excise tax collection target of Rs 40,000 crore—up from Rs 36,500 crore last year—the state’s approach is clear: higher liquor prices will drive higher revenues. However, this strategy has sparked debate, with its impact on consumers, manufacturers, retailers, and hospitality businesses could be significant, raising questions about affordability, sales trends, and broader economic effects.
How is the industry taking the hit?
For liquor manufacturers and distributors, the price hike presents both a challenge and an opportunity. While aligning rates with neighbouring states could help curb cross-border smuggling and stabilise revenue collection, industry players warn that increased excise duties will escalate operational costs, compress profit margins, and make it harder for new brands to enter the market.
“The proposed increase in liquor prices in Karnataka is a two-edged sword for the industry,” Tushar Bhandari, Whole Time Director, Associated Alcohols & Breweries Ltd. told financialexpress.com. “Price alignment with surrounding states may check cross-border smuggling and stabilise revenues but also raises the entry barrier. For a brewery brand attempting to establish a niche in the market, increased excise duties mean higher costs of operations, reduced margins, and a tougher fight for consumer loyalty.”
Karnataka has long been known for its vibrant beer-drinking culture, particularly in Bengaluru, where pubs and microbreweries thrive. However, with rising costs, industry experts fear that price-sensitive consumers may reduce their consumption or switch to lower-cost alternatives, impacting overall sales.
Electronic auctions
Adding another layer of complexity, the Karnataka government has decided to auction unused liquor licenses electronically. Although this aims to enhance transparency, it may drive up acquisition costs, making market entry tougher for smaller brands. This could further consolidate the industry under established players.
“The shift offers a chance for differentiation,” says Bhandari. “Brands that experiment with pricing, local marketing, and premiumisation can still carve a niche. The challenge lies in balancing aspirational value with affordability while adapting to regulatory changes.”
How will this impact the consumers and hospitality industry?
While the government is focused on revenue maximisation, a significant price hike could have unintended consequences. Higher prices may discourage consumption, resulting in reduced overall sales and, paradoxically, a dip in excise collections. The hospitality industry, including bars, restaurants, and hotels, could also feel the pinch, as higher liquor costs may lead to reduced footfall and lower customer spending.
Varna Bhat, Founder of Blisswater and Master Blender, warns of the risks: “This is a fine line to tread. If the hike goes overboard, it will dampen consumer sentiment and result in the opposite of the intended revenue increase, negatively impacting manufacturers, retailers, and restaurants/bars alike. Karnataka has been a progressive state in excise policies, and we hope for a well-considered approach that benefits all stakeholders.”
How much for a peg in Bengaluru compared to other metros?
Karnataka’s excise policies have ensured that a bottle of your favourite spirit costs significantly more in the state, and the latest price comparisons prove it. Take Jameson Triple Distilled (750ml), for example. While it costs Rs 1,800 in Gurugram and Rs 2,375 in Goa, the same bottle in Bengaluru will set you back Rs 3,495— a full Rs 1,000 more than Mumbai.
And it gets worse for Scotch lovers. Chivas Regal 12-Year-Old (750ml) is priced at Rs 5,145 in Bengaluru, a whopping Rs 2,845 more than in Gurugram, where it sells for Rs 2,300. Even in Goa, the party capital, it costs just Rs 3,320. If you prefer aged whisky, Ballantine’s 17-Year-Old Scotch (750ml) is a shocking Rs 9,545 in Bengaluru—making it Rs 4,000 more expensive than in Gurugram and Rs 2,000 more than in Goa.
Even single malts are hit hard. A Glenfiddich 12-Year-Old (700ml) will drain Rs 8,300 from your wallet in Bengaluru, whereas Delhi drinkers get it for Rs 5,200— a difference of over Rs 3,000! Meanwhile, The Glenlivet 15-Year-Old (700ml) in Bengaluru stands at a staggering Rs 8,920, compared to just Rs 6,000 in Gurugram.