Financial Daily from THE HINDU group of publications
Thursday, Mar 23, 2006
Financial Daily from THE HINDU group of publications Thursday, Mar 23, 2006 |
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Industry & Economy
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Breweries States - Karnataka Excise duty hike in Karnataka to hit beer industry Our Bureau
Bangalore , March 22 The All India Brewers' Association has said that the Karnataka Government's decision to hike duties on beer could impact investments into the sector. The association President, Mr Richard Rushton, told Business Line that beer companies might revise their decision to invest more to upgrade their breweries in the country because of the steep increase in excise duties. "The level of investments will now have to be adjusted because of the recent announcement," Mr Rushton said. This could impact the quality of beer in the country. The State Government, in its Budget, announced that the price of beer has been increased to Rs 5 per bulk litre from Rs 4 per bulk litre.
Revenues to fall
Even the revenues from the sector would slow down because of the increase in excise duties. He, however, said with the removal of wholesale channel, the 5 per cent margin of the wholesaler should be passed on to the customers. "The beer market is extremely price-sensitive. The industry will now re-double its efforts to see that the Government revises its stand on the issue," he said. Mr Rushton said historically beer is a heavily taxed beverage and coupled with the fact that the industry is at least six times more capital intensive than the spirits' industry, such a heavy burden could destroy the domestic industry.
More Stories on : Breweries | Excise and Customs | Karnataka
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