Tax revamp cuts premium spirit prices by up to 23%

Bengaluru: Several premium whisky, gin and tequila brands in Karnataka are set to become significantly cheaper — 5% to 23% — after the state government's liquor tax overhaul. Revised pricelists accessed by TOI, ahead of their official release on Saturday, show sharp cuts across prestige-and-above spirits.In the sample basket reviewed by TOI, prices fell by 15.1% on average. The changes come after Karnataka became the first state to adopt an Alcohol-in-Beverage (AIB) taxation system, which links excise duty directly to alcohol content instead of the earlier bulk litre-based structure.The Karnataka budget 2026–27 introduced the policy. The Siddaramaiah government has reduced the number of excise slabs from 16 to eight.The steepest reductions are in imported Scotch whiskies and premium international spirits. A 700ml bottle of a 12-year-old Scotch whisky in the Rs 6,000 segment will now retail at around Rs 5,300, down from Rs 6,360. A leading blended Scotch whisky has seen its price cut to nearly Rs 4,000 from more than Rs 5,100.A premium Japanese whisky brand has recorded price cuts of over 20%, while a leading imported gin brand will become cheaper by nearly Rs 500 for a 750ml bottle.A portfolio of premium tequila variants priced between Rs 8,000 and Rs 18,000 has seen reductions of roughly Rs 1,100–1,200 per bottle.Industry executives said the new framework benefits premium brands because many of them have alcohol strength levels similar to lower-end Indian-made foreign liquor products, which were previously taxed more aggressively under Karnataka's older slab-based system. The move is significant for the alcobev industry because Karnataka is among India's largest liquor markets and has historically imposed some of the country's highest taxes on alcoholic beverages.During its latest earnings call, United Spirits, owned by Diageo India, described Karnataka's move as a "progressive intervention" that would provide "the much-needed shot in the arm for continued premiumisation" in the state. The company said it had already started seeing price reductions of 15% to 35% across parts of its portfolio under the revised structure."We are feeling good on the policy front driven by the progressive intervention in Karnataka," United Spirits CEO and MD Praveen Someshwar said during the call.Sanjit Padhi, CEO of the International Spirits & Wines Association of India, said the reforms would "bring pricing in line with other states". At the same time, budget liquor is expected to become more expensive, especially in the lower-priced 180ml segment, where taxation will now align more closely with alcohol strength.