Union Budget 2012: Desi daru dull, foreign brew on a high

Tax hikes have taken the punch out of the liquor industry. Excise duty hike on packaging and service tax increase on bottling charges will impact the profit margins of makers of local alcoholic beverages, forcing some to explore price increases. A 2% rise in excise duty on packaging material also comes on the back of the recent 8% spike in the cost of glass bottles.
Initial estimates suggest that the country’s largest liquor marketer, United Spirits Ltd, may be impacted to the extent of Rs 50-55 crore annually . But it’s the smaller companies that may opt for price hikes as the latest blow coincides with volatile costs of the key ingredient — extra neutral alcohol. Industry executives, however, say a price hike may not be easy as governments determine the consumer price in some of the bigger states.
There’s some cheer for imported spirits, though. The overall tax regime on imports will drop to 150% from 161% following the removal of additional duty. This could lower the price of Chivas Regal 12 Year and Johnnie Walker Black Label by about Rs 200-250 per bottle in Delhi.
Budget 2012
Budget News 2012