Massive hike in liquor prices; dip in sales of high quality brands

GUWAHATI: Unplanned tax hike has resulted in massive increase in prices of liquors in Assam leading to dip in sales of high quality brands and revenue collection for the State's exchequer.

Even though the State Government recently imposed 25% additional tax on Maximum Retail Prices (MRP) of liquors with an aim to garner more revenue, in reality it is not a 25% tax increase for all liquor segments. The new prices in the upper segments of liquor make them around 50% to 60% costlier.

"For example the Red Label whisky used to cost Rs 1,900 per full bottle. After adding the 25% tax on MRP it should have been in between Rs 2,300 & Rs 2400 per bottle. However, the actual price is over Rs 3200 now due to inclusion of import and custom fees. Similarly, many upper segment brands are now priced very high and work out to much more than 25% on the previous MRP," a liquor shop owner said. He said a full bottle of Chivas Regal Branded Scotch Whisky Aged 18 Years had earlier used to cost Rs 8750 against the present price of Rs 12,000 for inclusion of import and custom fees.

On other hand about 70% of Indian Made Foreign Liquor (IMFL) market depends on the sale of 180 ml size liquor bottles (popularly called the quarter) which comprise the smallest bottles. The 750 ml (popularly the full bottles) bottles are normally not sold in large quantities.

"Under such circumstances the State Government should have levied more tax on the 180 ml size bottles and kept the 750 ml bottles with minimum tax increase. But the prices have increased segment-wise. While the lower segments have increased by 25% on the MRP, the upper segment brands have increased with 50% to 60% tax," another wine shop owner said. He said there is already a dip in sales of luxury brands such as Black Dog, 100 Pipers, Red Label etc due to sharp increase of prices. "Those taking Black Dog & Red Label have now started drinking Blenders' Pride and Signatures which arte relatively cheaper," he said.

"Decline in sales will eventually affect revenue collection by the State Government. Due to unplanned tax hike some wine shop owners are quoting prices at their own will," another liquor shop owner said.

A senior Excise Department official while admitting the development has told The Sentinel that there has been sharp increase in prices of Foreign Made Foreign Liquor (FMFL) products. "Besides 25% tax on MRP imposed by the State Government the prices of FMFL products include import duties, custom fees etc. We have already taken steps to regulate the prices and submitted a proposal before the State Cabinet," the official said while claiming that the prices of IMFL products have increased based on 25% tax hike on MRP.

Meanwhile, some of the liquor retailers are yet to remove hoardings of liquor brands in the outlets. In February this year the State Excise Commissioner had directed the Excise Superintendents of all the districts to ensure that the liquor retailers to remove hoardings of liquor brands in the outlets, and to ensure that the retailers do not put up any such hoardings in future. Such hoardings promoting liquor brands is a violation of the Excise rules and instructions.

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