Karnataka has seen a big increase in beer sales in the first 6 months of this year, with the volume of beer sales up by 41.32% from the same period last year. Beer sales alone generated ₹3,377.88 crore in the last 6 months, and the state Excise Department received a big injection of cash from beer sales as well. The current data shows that changes made in the beer market by the Alcohol in Beverage (AIB) policy have been beneficial.
The Excise Department had collected ₹2,836.64 crore in beer sales between April and September last year. This year, the revenue increased to ₹3,377.88 crore, which is an additional income of ₹541.24 crore. The rapid growth in beer sales is occurring at a time when Karnataka's liquor market is changing as a result of the AIB policy. This policy, which was announced on May 11, will see changes in the retail prices of some alcoholic beverages, such as lager beers with 5% alcohol content and some premium Indian spirits like Scotch whisky.
Karnataka’s excise revenue collection also increased in the first half of the year. Between April and September, the state collected ₹22,191.63 crore in excise revenue compared to ₹19,570.23 crore in the same period last year; this is an increase of ₹2,621.40 crore or 13.39%. That includes income from Indian-made liquor, beer sales, licence fees, penalties, and other sources of income to the Excise Department.
The state government has set an ambitious excise revenue target of ₹45,000 crore for the 2026-27 financial year. The department had generated nearly ₹22,192 crore during the first six months and is close to fulfilling half its annual target. Officials and industry experts also expect revenue to be up even more with the advent of the festive season—which is traditionally associated with a rise in demand for alcoholic beverages.
Beer sales growth has also intensified in the past six months. Beer sales increased 34.92% between April and June compared to the same period in the previous year. Moreover, it got even better between July and September when beer sales grew 49.69%. The total increase was 41.32%.
The increase in beer sales is in contrast to the relatively modest increase in Indian-made liquor sales. Indian-made liquor sales rose only 1.14% in the April-September period, but the revenue contribution from this category is much larger than that of beer. Indian-made liquor generated ₹17,424.57 crore in revenue during the first six months, compared to ₹15,376.22 crore during the same period last year.
The sources said that the increase in revenue of Indian-made liquor was most visible in the first four price slabs from ₹90 onwards and up to ₹165 for a 180 ml bottle. These lower-priced segments are thought to constitute over 70% of the total excise revenue received by the state from the category. In Karnataka, the prices of Indian-made liquor are determined based on the applicable pricing and taxation slabs.
Beer and Indian liquor’s different performance is an indication of the impact pricing change has had on consumer purchasing behaviour. The rapid increase in beer volumes after the AIB policy suggests that lower retail prices may have created higher demand for beer by consumers. Meanwhile, the state government has continued to grow revenue despite changes to the pricing structure of certain products.
The upcoming months will be closely watched by the Excise Department as Karnataka enters the festival-heavy period of the financial year. Beer sales are already booming, and overall collections are 13.39% higher than the previous year in the first six months, so it is to be expected that the department will continue to work hard to achieve its ₹45,000 crore annual target. If this continues, beer could still be one of the major contributors to Karnataka's excise revenue growth in the next six months of 2026-27.
