The Confederation of Indian Alcoholic Beverage Companies (CIABC) has appealed to the Telangana Government to permit a price revision for alcoholic beverages, citing a sharp increase in the cost of production and the absence of a regular annual price review mechanism.
The industry seeks a kind consideration of price revision request of ₹100–₹200 per case for Indian Made Foreign Liquor (IMFL) and 5 per cent hike for wine products. This would translate to a modest increase of just ₹2.50 to ₹5/- per 180 ml bottle.
While the beer industry has already received approval for a price hike, spirit and wine manufacturers are yet to receive similar relief, despite facing identical cost pressures.
CIABC Director-General Anant S Iyer said that there had been a sharp increase in production costs across the operational and manufacturing chain.
“Since the last price revision in May 2023, the industry has witnessed a substantial rise in input costs, including extra neutral alcohol (ENA), malt spirit, packaging materials, labour, transportation and other services,” he said.
The industry association has submitted a proposal to the State Government for WPI-linked price escalation to allow for systematic, inflation-based adjustments.
“Currently, the government retains over 70 per cent of the Maximum Retail Price (MRP) of alcoholic beverages. In contrast, manufacturers receive only 12-15 per cent, and retailers about 15-18 per cent. While the government income goes up, supplier companies have to absorb the cost escalation in the absence of an annual review mechanism,” Iyer said here in a statement on Saturday.
“The alcoholic beverage sector remains outside the scope of GST, preventing companies from claiming Input Tax Credit (ITC) on the GST paid for raw materials. This exclusion results in an additional 3-5 p.c. increase in production costs,” he said.
Published on May 3, 2025