The Hindu Business Line : Beer price goes up in Karnataka

However, the hike is effected through a combination of increase in bottle deposit and basic price. The consumer will be paying Rs 2 more towards bottle deposit, which is refundable, and Re 1 as increase in basic price. This means the net increase in price will be Re 1 if the consumer returns the bottle to the trade. The new deposit is over and above the existing Rs 3 deposit included in the earlier retail price.

The industry observers said the price increase would have no impact on consumption as the net hike was just Re 1. "The consumer will now pay Rs 46 (instead of Rs 45) on lager and Rs 49 (Rs 48) on strong beer as the component of refundable bottle deposit in the price is Rs 5," they said. This newspaper had earlier reported on the likely price increase following strong representations made by brewing majors, United Breweries (UB) and Shaw Wallace, in the wake of shooting bottle price.

It must be mentioned that shortage of bottles, partly caused by the failure of the industry to inject fresh bottles into the system over last few years, saw recycled bottle cost moving up from Rs 3.50 to Rs 7 as breweries stepped up production for the peak consumption months in summer. The increased input cost had prompted players like UB and Shaw Wallace to approach the States, including Karnataka, for a price relief. But even as the brewers won a price increase in free-price markets like Karnataka, others such as Andhra Pradesh, which has not allowed price hike in six years, turned down the industry representation once again.

Meanwhile, the recycled bottle price has now climbed down to Rs 4.50 following the injection of fresh bottles and the toned down production schedule of breweries after pipeline filling for the summer months.