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Excise duty hike: Consumers shift to cheap
May, 19th 2011

The massive hike in excise duty has severely affected the sale of Indian Made Foreign Liquor (IMFL) across the city. The result: Many consumers have shifted to cheaper brands and several others to country liquor.

The average duty hike is 45% and came into effect on May 1.

FN Ginwalla, president, Maharashtra Wine Merchants Association, admitted that sales have dropped. It is for the first time in the history of the state that there has been such a massive increase in duty, said

Ginwalla. The average hike has been a whopping 45% as compared to previous instances when it has been around 10%. There is tremendous resistance to high prices, he said.

Now, three pegs of Royal Stag whisky (180 ml) costs Rs 150; previously it was Rs 105; the cost of three pegs of White Mischief vodka has shot up from Rs 80 to Rs 125.

Similarly, a bottle of Kingfisher beer (650 ml) that cost Rs 77 is now Rs 95.

Naresh Shetty, owner of the Mumbai Wine Merchants shop in Lalbaug, said people are now shifting to cheaper brands. People will drink anyway and since they cant afford such prohibitive rates, they are looking for cheaper alternatives, he said.

Consequently, the sale of country liquor has shot up. Shetty said his shop is selling around 336 bottles everyday, as compared to 240 previously. In contrast, the daily sale of Kingfisher beer has dropped from 98 bottles to 48.

Ginwalla says such hikes would result in a loss of revenue to the state as many people will bring in liquor from places like Goa and Daman, where liquor is cheaper.

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