Bengaluru | Mumbai: After Delhi, Andhra Pradesh and West Bengal raised the duty on alcohol citing the Covid crisis, liquor companies fear other states will follow suit, further damaging the category already impacted by the lockdown and a cutback in discretionary spends.
Delhi allowed liquor shops to reopen, resulting in long queues of tipplers. But this was accompanied by the state levying a ‘Special Corona Fee’ of 70%.
The overcrowding outside liquor shops has spooked authorities. Civic authorities in Mumbai said these shops will not be allowed to open in the city
Soon after the tax-hike announcements, the share prices of top three listed liquor firms — United Spirits, United Breweries and Radico Khaitan — fell 6-8%.
Such a steep hike in duty will be a dampener. It will hit volumes. There is an apprehension that other states, too, will raise duties.