Hyderabad: Beer and whisky prices in Hyderabad could soon see an increase, as the Telangana government is currently reviewing proposals from breweries and distilleries seeking a price revision of up to 15 per cent. According to media reports, the move is being considered in response to rising production and operational costs faced by manufacturers.

Breweries have proposed an increase ranging between 12 and 15 percent, citing mounting expenses linked to production and distribution. Distillery operators have independently approached the government with similar requests, arguing that escalating input costs are making current pricing unsustainable.

Several factors are contributing to the proposed hike. Global supply disruptions linked to the ongoing Iran conflict have impacted the availability of raw materials. At the same time, higher fuel and natural gas prices have significantly increased manufacturing costs for liquor producers. Ongoing geopolitical tensions have also added pressure on supply chains, making operations more expensive.

Glass shortage adds to cost burden

A major concern flagged by industry players is the sharp decline in glass production, which has reportedly fallen by nearly 40 per cent. This has pushed up the cost of bottling considerably, adding another layer of financial strain on breweries and distilleries.

Government yet to take final decision

The Telangana government has not reached a conclusion on the proposed revision so far. According to reports, a file containing recommendations from breweries has been referred to a judicial committee. The panel has been tasked with evaluating cost structures and assessing the potential impact on the market, and is expected to submit its report within a week.

A final decision will be taken by the government after reviewing the committee’s findings.

If approved, this would mark the second increase in liquor prices in the state within a short span. Beer prices were raised by 15 percent in February following a dispute with United Breweries Ltd., which had warned of halting supplies of popular brands such as Kingfisher and Heineken. The company had cited losses due to stagnant pricing as the reason for its stance.

Following the earlier revision, the price of a 650 ml bottle of Kingfisher Ultra rose from Rs 210 to Rs 250.

The timing of the proposed hike coincides with peak summer demand, when consumption of beer and liquor typically rises sharply. Experts have cautioned that if production costs continue to remain unaddressed, there is a possibility of supply shortages in the coming weeks.

From the government’s perspective, a price increase also carries fiscal implications. Estimates suggest that a revision could generate additional monthly revenue in the range of Rs 130 crore to Rs 150 crore.

Tiered pricing model under consideration

Instead of a flat increase, the government is reportedly examining a tiered pricing structure. The proposed model could introduce five distinct slabs based on parameters such as bottle size, which may range from 90 ml to 750 ml, brand category, and applicable tax rates.

Such an approach would result in varied price adjustments, with separate revisions likely for budget liquor and premium segments.

A final announcement on the matter is expected in May, once the committee submits its report and the government completes its review.