Hyderabad: Liquor and beer prices are expected to rise from May. Breweries and distilleries have asked for a price hike, reportedly citing global supply disruptions triggered by the US/Israel- Iran war and a sharp rise in production costs due to escalating fuel and natural gas costs. The government has referred the proposals to a judicial committee headed by a retired judge and sought a report within a week, official sources said.
Breweries and distilleries said there was a 40 per cent drop in glass production, a 20 per cent increase in bottle costs, and higher raw material expenses due to the war. The government was reviewing proposals for a hike of between 12 and 15 per cent, with increases likely to be implemented in phases based on brand category and bottle size.
The government had last revised liquor prices in May 2023, and a review is due every two years as per norms. While the revision was scheduled for May last year, the proposals were kept on hold. Breweries and distilleries submitted revised proposals on Tuesday, against the backdrop of geopolitical tensions and supply disruptions.
A key factor contributing to the price hike was stated to be the decline of about 40 per cent in glass production, due to natural gas shortages. This has increased bottling costs, with prices of empty bottles rising by around 20 per cent. Several glass manufacturing units have reportedly reduced output or shut down, further aggravating supply constraints.
The government is yet to take a final decision. Sources said a file containing the recommendations had been forwarded to the judicial committee which will assess cost factors and market impact before submitting its report. The government will take a final call based on this report.
Adding urgency to the issue was the seasonal spike in demand, put at 30 per cent, as consumption of beer and liquor typically rises during the summer. Experts have cautioned that a shortage of beer cannot be ruled out if rising production costs were not addressed. Though no visible shortage has emerged yet, supply is said to be moderating.
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