Karnataka liquor fee hike has put the state’s alcohol industry in a tight spot. After backlash from local distillers, the government reduced the proposed 100% increase in licence fees to 50%. But many say the damage is already done.
Distillers argue the hike is still steep and unfair, especially when neighbouring states like Andhra Pradesh are actively inviting them to relocate.
Local Brands Hit Hard
Take Huli, for example—India’s first jaggery-based rum, born in Mysuru. Its co-founder Aruna Urs didn’t mince words on X.
He posted, “The government is forcing #Huli to leave Mysuru. Is this @INCIndia’s idea of ease of doing business?”
Andhra Pradesh didn’t waste time. Urs got a call from the CM’s office, offering policy tweaks just to welcome Huli. “They tracked me down via Twitter. That’s real intent,” he said.
He’s not moving yet, but setting up a second unit outside Karnataka is now on the table.
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Not Just About Fees
The Karnataka government says the revised 50% hike is the first in eight years. It also added reforms—licences will now be valid for five years, with self-declared renewals and no physical inspections.
Sounds good? Not to small distillers.
“We’re already struggling. Add this hike and we can’t survive,” said one industry insider.
To make things worse, the state has increased beer and low-end IML (Indian-made liquor) prices four times in two years. That’s hitting both businesses and consumers.
Brewing Trouble Isn’t New
This clash isn’t a one-off. In late 2023, the government restricted night-shift brewing in Mysuru. Major names like United Breweries, Carlsberg, and Bira were affected. The reason? Staff shortage.
After strong pushback, the decision was reversed. But the pattern worries distillers.
Andhra’s Red Carpet vs Karnataka’s Red Tape
Karnataka earns nearly 20% of its total revenue from liquor taxes. It needs the money. But local businesses say the state is short-sighted.
By hiking fees, it risks driving out homegrown brands—along with jobs, tax revenue, and pride.
Meanwhile, Andhra Pradesh is playing the long game: offer better terms, attract talent, and grow the industry.
In this tug-of-war, Karnataka might just lose its spirits—literally.
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