Share price of Sula Vineyards Ltd., GM Breweries Ltd. saw a significant uptick following the Maharashtra government's decision to raise excise duties on liquor. GM Breweries rose nearly 6% while Sula Vineyards was up nearly 2%.
The new excise duty hike applies to both retail purchases from liquor stores and consumption in restaurants or bars, making alcohol more expensive in the state.
However, beer and wine have been exempted from this excise duty hike. Beer has a lower alcohol content compared to hard liquor and was thus exempted. In the case of wine, the state's policy aims to promote the industry, given that a significant portion of the country's wineries are located in Maharashtra, and many farmers who supply grapes to these wineries are based here, an HT report stated.
The state cabinet, chaired by Chief Minister Devendra Fadnavis, approved measures on Tuesday to increase the revenue of the Excise Department. These initiatives are expected to boost the department's annual revenue by approximately Rs 14,000 crore.
Premium foreign liquor brands have seen the most significant hike, with the new rate setting the minimum retail price at Rs 360. The excise duty on Indian-made foreign liquor with a declared manufacturing value up to Rs 260 per bulk litre will increase from three times to 4.5 times the manufacturing value. Meanwhile, the excise duty on country liquor will rise from Rs 180 to Rs 205 per proof litre.
The exemption for beer and wine has led to a surge in the stock prices of companies in these sectors.
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