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Alcohol sale in Karnataka falls after government hikes prices

Hindustan Times, Bengaluru | ByVenkatesha Babu | Edited by Sabir Hussain
May 07, 2020 09:37 PM IST

On Wednesday, Chief Minister B S Yediyurappa while announcing a ₹1,610 crore Covid-19 relief package on Wednesday had said that it would be primarily funded by a hike of 11% in excise tax. This was on top of the 6% hike which was announced in the budget presented in March indicating a cumulative 17% hike in retail prices.

On the fourth day after the sale of alcohol resumed in Karnataka, the state witnessed a sharp decline in sales after the government hiked retail prices of liquor by 17%, official said.

Alcohol sale fell in Karnataka a day after the government hiked prices to fund a Covid-19 relief package.(Representative Photo/ANI)
Alcohol sale fell in Karnataka a day after the government hiked prices to fund a Covid-19 relief package.(Representative Photo/ANI)

According to officials of Karnataka State Beverages Corporation Ltd, alcohol worth 165 crore were sold on Thursday compared to 232 crore of sale on Wednesday before the price hike.

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On Thursday the state sold 27.56 lakh litres of OIndian Made Foreign Liquor (IMFL) priced at 152 crore and 5.93 lakh liters of beer valued at 13 crore.

The sale of alcohol had stopped from the night of March 24 as the lockdown to check the spread of coronavirus took effect. After more than 40 days of lockdown, the Karnataka government had finally agreed to resume sales from May 4 but had said that only about 4,500 standalone liquor stores could sell whereas bars, restaurants and stores located in shopping complexes and malls continue to be shut to ensure adequate social distancing.

Immediately after re-opening on Monday it had sold alcohol worth 45 crore. On Tuesday the sales rose to 197 crore and on Wednesday it touched 232 crore.

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Chief minister B S Yediyurappa while announcing a 1,610 crore Covid-19 relief package on Wednesday had said that it would be primarily funded by a hike of 11% in excise tax. This was on top of the 6% hike which was announced in the budget presented in March indicating a cumulative 17% hike in retail prices.

A KSBCL official speaking to HT however claimed that the decline in liquor sales was not a surprise and was expected. “There was a huge pent-up demand due to closure of all sales for nearly 42 days and thus in the initial days there would be a spurt as people try to stock up or replenish diminished stock. Before the closure too, Karnataka on an average did about 55-60 crore sales per day and despite the hike in prices we expect we will be able to meet our annual target.”

In 2019-20 the state had mopped up 19,701 crore of revenue from the sale of liquor (till February as the budget was presented on March 5). The revenue target from sale of alcohol this year is 22,700 crore.

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