Beer and whisky are set to get more expensive in Hyderabad, as the Telangana government examines a proposal from breweries and distilleries to revise liquor prices by up to 15%, sources told NDTV Profit on Tuesday.
Breweries have suggested a price hike in the range of 12% to 15%, citing rising production and operational costs. Distillery operators have also approached the government separately, requesting an upward revision to offset increasing expenses.
The reasons behind the proposed hike could be varied. Global supply disruptions due to Iran war have affected raw materials, while rising fuel and natural gas costs have pushed up production expenses for distilleries. Geopolitical tensions have further strained supply chains.
One significant contributing factor is a nearly 40% drop in glass production, which has made bottling considerably more expensive.
The government has not yet taken a decision. As per reports, a file containing the breweries' recommendations has been forwarded to a judicial committee, which has been asked to submit its findings within a week after assessing cost factors and market impact. The government is expected to take a final call based on the committee's report.
This would be the second price revision in the state within months. Beer prices were already raised by 15% in February, following a dispute with United Breweries Ltd., which had threatened to halt supplies of Kingfisher and Heineken to the Telangana Beverages Corp,, citing losses due to stagnant pricing. A 650ml bottle of Kingfisher Ultra, previously priced at Rs 210, now sells for Rs 250.
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The timing also adds pressure. Demand for beer and liquor typically rises sharply during summer, and experts have warned that a shortage in beer supply cannot be ruled out if production costs continue to go unaddressed. For the state government, the calculation is also fiscal, as a price revision is expected to generate additional revenue of approximately Rs 130 crore to Rs 150 crore per month.
Instead of implementing a uniform hike, the government is reportedly considering a tiered pricing model. The proposed revision may include five separate slabs based on factors such as bottle size (ranging from 90 ml to 750 ml), brand category, and applicable tax rates. This approach could lead to differentiated price increases, with separate revisions for budget liquor and premium brands. A final announcement is expected in May, following the committee's report.
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