Karnataka beer sales surge 41.3% as AIB policy boosts excise revenue
Karnataka collected Rs 3,377.88 crore from beer during April-September, while total excise revenue reached Rs 22,191.63 crore in the first half of 2026-27.
INDIA – Beer sales in Karnataka rose 41.3% year-on-year during the first half of 2026-27, with the increase following the implementation of the state’s Alcohol in Beverage (AIB) policy, which reduced the maximum retail price of select beer and premium Indian Made Liquor (IML) brands.
According to the Karnataka Excise Department, beer-related revenue reached Rs 3,377.88 crore (US$349.1M) between April and September 2026, compared with Rs 2,836.64 crore (US$293.18M) during the corresponding period in 2025. The increase amounted to Rs 541.24 crore and contributed to higher overall excise collections ahead of the festive season.
Beer sales increased 34.92% between April and June before accelerating to 49.69% from July to September. Overall, beer sales grew 41.32% during April-September compared with the same period a year earlier.
The AIB policy came into effect on May 11, 2026, reducing the MRP of lager beers containing 5% alcohol by volume, along with selected premium IML brands, including Scotch whisky.
Karnataka’s overall excise revenue increased 13.39% during the first six months of the financial year, reaching Rs 22,191.63 crore (US$2.29B) compared with Rs 19,570.23 crore (US$2.02B) in the same period last year. The figure includes revenue from IML, beer, licence fees, fines and other excise-related sources.
The state has set an excise revenue target of Rs 45,000 crore (US$4.65B) for 2026-27. With Rs 22,191.63 crore collected by September, the Excise Department has achieved nearly half of its annual target.
IML revenue grew at a slower pace, with collections reaching Rs 17,424.57 crore during April-September 2026 compared with Rs 15,376.22 crore a year earlier. This represents growth of 1.14% in IML sales during the first six months.
Industry sources said the increase in IML revenue has mainly come from lower-priced IML categories, with prices ranging from about Rs 90 for the first slab to Rs 165 for 180 ml in the fourth slab. These categories account for more than 70% of Karnataka’s total excise revenue, according to the sources.
The contrasting growth rates between beer and IML come after the state introduced the AIB policy, which lowered prices across selected alcoholic beverage categories.
The policy has coincided with a sharp increase in beer sales, while IML recorded comparatively modest growth during the same period.
Karnataka’s festive season will add to the period covered by the first-half figures, as the state continues working towards its Rs 45,000-crore excise revenue target for 2026-27.
The Excise Department’s figures show that beer contributed Rs 3,377.88 crore to state revenue during the six-month period, while IML remained the larger contributor with Rs 17,424.57 crore in collections.
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