Industry & Economy
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Breweries
Paying more for the pint
Our Bureau
Bangalore
,
Feb. 28
IT'S going to cost more for tipplers. Indian Made Foreign Liquor, popularly known as IMFL, is likely to cost more as the special duty on molasses has been doubled from Rs 500 to Rs 1,000 per metric tonne. According to Mr Vijay Rekhi, President, UB Spirits Division, the initial estimates point to an input cost increase of at least Rs 10 per case (a dozen bottles of 750 ml make a case).
And given the multiplier effect due to layered federal taxation on the basic price, liquor could be dearer by Rs 20 to Rs 30 per case at the consumer's end. But it is not yet clear whether the companies would be in a position to pass on the additional burden to the consumer.
Mr Lalit Khaitan, CMD, Radico Khaitan, said that the doubling of excise on molasses is surprising given the increasing prices of molasses in recent months.
"We were, in fact, requesting for an excise exemption on molasses. This would particularly impact the margins of smaller manufacturers." Not to mention the pockets of those who partake!
The IMFL trade in most large States are controlled by Government bodies and taking a basic price increase in these markets will be a tall order for these companies.
Further, on account of the shooting price of extra neutral alcohol (ENA) in the last 18 months, most companies had pushed for a price revision in the recent past.
The marketers fear that many brands may not be in a position to absorb another round of price hike as it could upset the tipplers who tend to down-trade in the wake of price escalation.
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