United Spirits, United Breweries shares rise up to 6.5% as Karnataka govt revamps liquor policy

United Spirits, United Breweries shares rise up to 6.5% as Karnataka govt revamps liquor policy

• Karnataka revamps liquor policy, removes price controls from 2026
• Shares of United Spirits, United Breweries rose over 6.5% on news
• Excise duty to be based on alcohol strength, not pricing slabs

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Shares of United Spirits, United Breweries rose over 6.5% on March 6 as Karnataka government revamped its liquor policy and said taxes will be based on actual alcohol content.

Brokerage Nuvama said the announcement is positive since slab-based pricing controls have been removed and also deregulation is a positive development.

It maintained ‘buy’ on United Spirits, United Breweries and Allied Blenders.

At 1:36 pm on March 6, United Spirits shares were trading 5.5% higher at Rs 1,398.9 apiece while those of United Breweries climbed nearly 4% to Rs 1,712 apiece.

Karnataka plans to scrap government-administered price controls on alcoholic beverages from April 2026, a major relaxation for beer and liquor makers who have for decades required government approval to sell their products.

The state also plans to introduce an alcohol-in-beverage (AIB) based excise duty structure that taxes alcohol based on its strength and reduce pricing slabs to eight from 16, while allowing producers to decide prices.

Shares of Tilaknagar Industries and Allied Blenders were trading 6.8% and 4% higher, respectively, in the afternoon trade.

Tilaknagar Industries is the largest player in the "Prestige and Above" segment in Karnataka with a 39% market share.

Karnataka is one of the top revenue-generating states for United Spirits' "Prestige & Above" portfolio (McDowell’s No. 1, Royal Challenge). United Breweries is the largest beer company.

Karnataka is one of the top markets for brandy in India for Allied Blenders.

Shares of Som Distilleries were trading higher by 4.5% while those of Radico Khaitan were trading 6% higher.

Karnataka is one of the largest states for liquor consumption in India.

In Karnataka, the government controls retail alcohol pricing. Manufacturers declare ex-factory prices, based on which the state fixes the maximum retail price.

The state has among the highest alcohol taxes in India, with liquor classified into multiple price sections, each attracting an additional excise duty.