Maharashtra government has announced 50 percent cut in excise duty on imported liquor and this will make premium liquor brands cheaper.
Foreign liquor brands including Black Label, Glenfiddich, Chivas Regal and Lagavulin 16 will get 25-35 percent cheaper, said analyst Karan Taurani, Senior Vice-President, Elara Capital.
"During the COVID wave, states charged exorbitant taxes and they saw huge decline in volumes. Tax hikes by states was around 10-12 percent pre-COVID. During COVID- it went up to 18-20 percent. This year it was 4-5 percent. State governments have realised that there is no point charging high taxes as it will impact excise duty collections. Maharashtra is one of the expensive markets for liquor, scotch, premium brands. Hence, this (50 percent reduction in excise duty) was need of the hour," he said.
Taurani added that the transition period for new prices to reflect is expected to be two months.
Abanti Sankaranarayanan, Chief Strategy and Corporate Affairs Officer, Diageo India said that reduction in excise duty on imported spirits in Maharashtra is in line with what they are seeing in other states.
"The reduction in duties will make these brands more accessible for consumers in Maharashtra, in line with states like Delhi, Haryana, West Bengal and Goa and is in sync with the strong consumer trend of premiumization in beverage alcohol," he added.