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Maharashtra’s liquor duty hike sends ripples through alcohol beverage industry
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Thursday, 12 June, 2025, 08 : 00 AM [IST]
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Abhitash Singh, Mumbai
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In a major fiscal move aimed at boosting state revenues, the Maharashtra cabinet has approved sweeping changes in excise duty structure and licensing norms for alcoholic beverages. While the state exchequer is expected to benefit to the tune of ?14,000 crore annually, the aftershocks of this decision are already being felt across the alcohol beverages manufacturing sector and the food & beverage service industry.
The most contentious change is a sharp hike in excise duty now allowed to go up to 4.5 times the declared manufacturing cost for certain categories of liquor. Industry insiders say this could severely squeeze margins for distillers, brewers, and bottlers operating in India’s second-largest liquor market.
Alcohol industry consultant from Mumbai on the condition of anonymity said, "This is not just a consumer story. Manufacturers and hospitality players will face mounting pressure to absorb or pass on costs. It will reshape pricing, consumption trends, and even sourcing strategies.”
Restaurateurs and pub owners argue that the policy could discourage new entrepreneurs from entering the business and prompt existing ones to reconsider expansion.
Shweta Mehra, a Navi Mumbai based resto-bar owner said,“Margins are already razor-thin and this adds one more cost layer that threatens the viability of small and mid-sized outlets.”
While the government justifies the move as a “rationalisation of duties” to curb revenue leakages and align with market realities, industry stakeholders are calling for greater consultation and phased implementation.
In parallel, the state has also greenlit the creation of 1,223 new posts within the excise department 744 regular and 479 supervisory to strengthen enforcement. While it signals a push for tighter control, experts warn of possible red tape and longer licensing processes in the short term.
With alcohol contributing a significant chunk to state revenues, especially in Maharashtra, the move may look good on paper. But if not executed with nuance, it could result in reduced business sentiment, lower product innovation, and strain on hospitality employment an industry that is still recovering from pandemic-era losses. As the state prepares to roll out the new excise norms, all eyes will be on how quickly and equitably the burden gets distributed across the alcohol beverage value chain.
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