365Telugu.com online news ,Hyderabad, May 4th, 2025:The Confederation of Indian Alcoholic Beverage Companies (CIABC) has called on the Telangana state government to approve a price revision for alcoholic beverages, citing escalating production costs and the lack of a regular annual price adjustment mechanism.
CIABC Director General Anant S. Iyer highlighted a significant surge in input costs since the last price revision in May 2023. Key expenses, including Extra Neutral Alcohol (ENA), malt spirit, packaging materials, labor, transportation, and other services, have risen sharply. The CIABC has proposed a WPI-linked price escalation model to enable systematic, inflation-adjusted price updates.
Iyer noted that the current revenue structure heavily favors the government, which collects over 70% of the Maximum Retail Price (MRP) of alcoholic beverages, while manufacturers receive only 12-15% and retailers 15-18%. “Interim tax increases have squeezed manufacturers’ margins, forcing them to absorb rising costs without an annual review mechanism,” he said.
The industry also faces challenges due to its exclusion from the Goods and Services Tax (GST) framework, which prevents companies from claiming Input Tax Credit (ITC) on raw materials. This adds an additional 3-5% to production costs, further straining finances.
The CIABC is requesting a price hike of ₹100–₹200 per case for Indian Made Foreign Liquor (IMFL) and a 5% increase for wine products, translating to a modest ₹2.50–₹5 per 180 ml bottle. While the beer industry has already secured a price increase, spirit and wine manufacturers are still awaiting approval despite facing similar cost pressures.
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Additionally, the CIABC raised concerns about overdue payments exceeding 45 days, totaling approximately ₹2,800 crore, with an interest burden of ₹400 crore. Iyer warned that the industry’s financial sustainability is at risk, and further taxation without price adjustments could threaten operations.
The CIABC emphasized its commitment to collaborating with the government and meeting consumer expectations but urged swift action to ensure the industry’s long-term viability.