Brewers Association of India alleges Karnataka Govt’s arbitrariness in beer regulations, favoring select firms in DP approvals.
Bengaluru (Karnataka) [India], March 5: Pointing towards increasing amount of arbitrariness in beer regulations in Karnataka, the Brewers Association of India (BAI) has said the State Government while dealing with the applications of rounding off of the DP (declared price) was favouring some companies.
The Karnataka government introduced the concept of rounding off of the DP (declared price) to nearest Rs.5 was introduced, while the application of one beer supplier, viz., M/s Som Breweries and Distilleries which applied with an upward price revision got approved without due documentary substantiation, the plea of BAI members were put on hold, the BAI, the apex body of the beer industry, which represents India’s largest beer makers such as the AB InBev, Carlsberg, and United Breweries (a Heineken company), said in its representation to the State government.
“As a result, our member companies, which are the biggest investors and contributors to Government revenues in the state, feel greatly aggrieved and discriminated against,” said that letter and demanded the State government to ensure level playing field for all beer suppliers in Karnataka. BAI has demanded that applications of its members should also be cleared with respect to rounding off in the DP where there is no consequent change in the MRP.
Highlighting the biasness in implementation of excise rules, the BAI has stated that “this is against the ethos of fair competition and will do more harm than good in the long run for the industry, the Government revenues, the consumers, local economy and investment in the state”.
According to BAI Director General Mr Vinod Giri: “In recent times we have been witnessing increasing amount of arbitrariness in beer regulation in the state which is threatening the industry growth as is evident from the recent trends in beer sales in the state. The frequent increase in taxes on beer is putting beer out of reach of most consumers while arbitrary mandates related to labels which is making producing in Karnataka increasingly difficult. And now we face a situation where excise rules seem to be not being applied uniformly to all suppliers, favouring some. If such arbitrariness continues our members might have to rethink their investments in the state.”
“BAI members account for majority of beer sold in the state and are major contributors to state’s revenues. Beer contributes disproportionately high to the Government tax revenues in the state. It accounts for only 8% of the alcoholic beverage sold in the state but 16% of the tax revenues earned from the sector. Further, this share has been rising; it was 11% five years ago and is now 16%. This was made possible by a stable policy environment in the state which allowed the industry to grow and contribute. But now we see a lot of arbitrariness in the implementation of excise rules. The State Government should immediately address our concerns and allow all beer manufacturers a level playing field,” Mr Giri added.
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