Karnataka liquor shops to shut on May 21 over licence fee hike

Time of India

19-05-2025

Representative image
BENGALURU: Buffeted by repeated hikes in excise duties and licence fees in the past two years, thousands of distilleries and liquor shops in Karnataka are planning a strike and demonstration on May 20 and a complete shutdown of all industry activities on May 21.
Store owners are planning to stop purchasing liquor from govt depots as a mark of protest.
Karnataka Wine Merchants Association
, along with National Restaurant Association of India and
Karnataka Brewery and Distilleries Association
, took the dual-protest measure after the latest blow came in the form of govt's May 15 draft notification doubling licence fees.
Experts: Frequent hike will shut more shops
Calling fee hikes "steep and unbearable", the store owners will shutter down on Wednesday. Of 12,000 licensed liquor stores in Karnataka,over 5,000 are participating in the shutdown.
According to the draft notification, the annual licence fee for breweries has increased from Rs 27 lakh to Rs 54 lakh, while for distilleries and warehouses, it has risen from Rs 45 lakh to Rs 90 lakh. The new fees take effect on July 1.
Industry representatives told TOI such frequent increases will lead to more business closures and higher prices for consumers. Nearly 30,000 letters of objections have been collected from employees, licensees, customers, vendors, and landlords, highlighting concern over a fourfold increase in fee this year.
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A senior excise department official said the hikes were implemented to address revenue shortfalls from the previous year. "The hike was a decision taken by the govt and we just implemented it. The decision is taken to cover the gap for the previous year target," the official said.
While the revenue target for 2024-25 was set at Rs 38,525 crore, the department managed to collect only Rs 35,530 crore, or 92.3% of the target.
Retailers noted the fresh licence fee hikes will particularly affect budget-segment sales and small outlets. More than 40 pubs in Bengaluru closed last year due to rising costs and declining customer numbers.
A pub chain owner in Koramangala, said: "The hikes are eating into all our profits. Earlier, it was AED (additional excise duty) hikes, now even the licence fee is doubled. We might as well shut our businesses.
Even in peak summer, there are barely any sales."
Sampath Kumar, vice-president of Karnataka Wine Merchants Association, said: "We had a meeting on Friday with our committee members. Both consumers and merchants can't bear the expenses."
Ananth Narayana, secretary of National Restaurant Association of India, added: "We generate so much employment, pay crores in taxes, yet the govt is intent on killing the golden goose. Last time, we saw excise collection dip after taxes increased, and many outlets went into the red. The govt is repeating the mistake."