Hyderabad: Telangana’s annual liquor price revision exercise has hit a roadblock, with the excise department putting a proposed increase in procurement prices on hold amid concerns that higher liquor rates could drive consumers to neighbouring Karnataka and Andhra Pradesh, potentially denting sales and state revenues.Nearly a month after a committee tasked with reviewing liquor procurement prices completed consultations with manufacturers, the exercise remains in limbo. According to sources, the panel has not met again since, as officials reassess the rapidly changing pricing landscape in neighbouring states before taking a final call.The rethink follows significant changes in Karnataka’s excise policy, which came into force in May. The state introduced a uniform excise duty structure across liquor categories, replacing the earlier system under which premium brands attracted substantially higher levies. Industry sources said the move led to a sharp reduction in retail prices of several premium liquor brands, resulting in a noticeable rise in sales.At the same time, Andhra Pradesh has not revised liquor prices, leaving several brands cheaper than their Telangana counterparts. Officials fear that any further increase in Telangana could widen the price gap, particularly in border districts, encouraging consumers to buy liquor from neighbouring states.Against this backdrop, the excise department is re-evaluating the committee’s recommendations instead of proceeding immediately with the annual revision.Telangana already imposes among the highest excise duties in the country, ranging from about Rs 550 to Rs 2,000 per case depending on the liquor category. During consultations, manufacturers sought a procurement price increase of around 15%, citing rising costs of raw materials, packaging and transportation. Any upward revision in procurement prices would ultimately be reflected in retail prices.Sources said officials are now assessing not only the likely impact on liquor sales within Telangana but also the broader implications for excise collections, a key source of state revenue. The department is particularly examining whether a wider price differential with Karnataka and Andhra Pradesh could trigger cross-border purchases and erode the state’s tax base.The three-member committee constituted for the annual price review had invited representations from liquor manufacturers last month and completed consultations as scheduled. However, the absence of any follow-up meeting has created uncertainty over the timeline for a decision.Industry representatives say the prolonged delay is affecting business planning and inventory management. While manufacturers continue to press for a revision, they say an early decision—whether for or against a price hike—is necessary to bring clarity and conclude the annual pricing exercise.
