In a recent directive, the Karnataka government has instructed major beer producers, including United Breweries, Bira, and Carlsberg, to suspend their third shift operations at breweries. This move, initiated due to a shortage of full-time excise officials and staff, may impact the beer supply in Karnataka, the second-largest consumer of the beverage in India. Notably, the order targets beer manufacturers exclusively and not spirit producers.
Source: The Print
The decision to halt the third shift operation, spanning from 10 pm to 6 am, is poised to affect the beer industry in Karnataka significantly. The state, home to multiple breweries operated by companies like UB, AB InBev, and Bira, witnesses the functioning of these establishments in three shifts, as per reports. Bengaluru, the state capital, particularly stands out as one of India’s major markets for tap beer, dominated by key players such as Kingfisher, Budweiser, Bira, Geist, and Toit. The popularity of beer in Karnataka extends beyond consumer preferences, serving as a vital revenue stream for the state.
In the fiscal year 2022-23, Karnataka raked in a substantial ₹30,000 crore from excise revenue, with beer contributing a notable 15% share to the overall alcohol excise revenue. Remarkably, the revenue generated from beer has witnessed a twofold increase over the past two years, reaching ₹4,500 crore. This underscores the economic significance of the beer industry in Karnataka and its role in bolstering the state’s finances.
Source: Mint
The state government’s decision to curtail the third shift operations in breweries is drawing attention, with speculation arising about its potential motives. Some media reports suggest that the move may be part of a broader strategy to boost the sale of India-made liquor (IML), including rum and whisky. By encouraging the consumption of domestically produced spirits, the government aims to channel consumer preferences towards these alternatives, possibly to enhance revenue streams and support local industries.
