The Maharashtra cabinet's recent decision to increase the excise duty on liquor has sent ripples across the alcohol industry and consumer base alike. From Indian-Made Foreign Liquor (IMFL) to premium imports and country liquor, the pricing structure is set to change drastically. Whether you're a casual drinker, a distributor, or someone in hospitality, this decision impacts you directly.

Let’s break down what the new excise duty policy means, how much more you might pay for your favorite drinks, and what the government aims to achieve with this change.

What Has Changed?

On June 10, 2025, the Maharashtra state cabinet approved a sharp hike in excise duties on multiple liquor categories, including IMFL, country liquor, and imported premium brands.

Key Updates:

• IMFL duty increased from 3x to 4.5x of manufacturing cost
• Country liquor prices increased by approx. 14%
• Imported premium liquor prices to rise by over 25%
• Beer and wine remain unaffected

"This is the first hike in IMFL excise duty in 14 years. The new rates aim to boost revenue without overburdening wine and beer consumers," said an official from the Maharashtra excise department.

How Will It Affect Retail Prices?

Let’s look at how the new rates will change what you pay at the store or bar.

Takeaway: If you buy liquor in Maharashtra, expect to pay a lot more—especially for mid-range and premium spirits.

Why Did Maharashtra Increase Liquor Taxes?

The Maharashtra government is facing a stretched budget and is looking for ways to fund schemes like Ladki Bahin and agricultural benefits. In January 2025, it formed a committee led by Additional Chief Secretary Valsa Nair to recommend ways to increase excise revenue. That committee's proposals were accepted this week.

Revenue Targets:

• FY 2024–25 Revenue from Excise: ₹43,620 crore
• FY 2025–26 Target Post-Hike: ₹57,000 crore
• Increase Expected: ₹14,000 crore

This revenue forms nearly 10% of the state’s total estimated income of ₹5.60 lakh crore for FY 2025–26.

"This decision is driven by fiscal needs and political obligations," said an insider from the finance ministry.

 

 

 

 

 

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What About Beer and Wine?

Surprisingly, beer and wine have been spared from the hike.

Reasons:

• Maharashtra already has one of the highest retail prices for beer in India.
• The state aims to promote its wine industry, which supports both local wineries and grape farmers.

Bottom Line: If you’re a beer or wine drinker, your bills won’t change—at least for now.

Introduction of Maharashtra-Made Liquor (MML)

In a strategic twist, the government has introduced a new liquor category: Maharashtra-Made Liquor (MML). Made from grains, this category will:

• Be priced around ₹148 for 180 ml
• Avoid the new excise duty hike

Why It Matters:

This is an attempt to create a locally competitive product to fill the gap left by rising IMFL prices. It also helps retain consumers within the legal market and deter them from shifting to illicit sources.

Will This Move Encourage Smuggling or Illicit Liquor?

This is a big concern.

Industry Viewpoint:

• "This will lead to cross-border smuggling from states like Madhya Pradesh and Goa," warned Pramod Krishna, former DG of the Confederation of Indian Alcoholic Beverage Companies.
• Country liquor hike was kept minimal to avoid pushing people toward unsafe, illegal alternatives.

The balancing act here is tricky: raise revenue without encouraging black market activity.

Reactions From Industry and Experts

The decision hasn’t been well received by industry professionals.

Concerns:

• Hospitality Sector: Bars and restaurants may lose footfall due to higher prices.
• Consumers: Price-sensitive consumers may switch to cheaper or illicit options.
• Retailers: Higher MRP could reduce volume sales, hitting profits.

"Maharashtra was already among the highest-taxed states for alcohol. This move may backfire," noted an executive at a leading beverage company.

What Should Consumers and Businesses Do Now?

If You're a Consumer:

• Stock up before prices officially increase.
• Consider switching to beer or wine if you're budget-conscious.
• Be wary of unlicensed or suspiciously cheap liquor.

If You Run a Bar/Restaurant:

• Update pricing menus quickly.
• Offer happy hours or bundled offers to retain customers.
• Explore local brands or MML options to keep costs manageable.

For Distributors/Retailers:

• Stay informed about revised wholesale rates
• Keep communication open with regular buyers
• Adjust inventory orders to reflect expected demand changes

Quick Recap

• IMFL prices are going up by over 60%
• Country liquor prices are rising by around 14%
• Imported liquor will be pricier by 25% or more
• Beer and wine stay the same
• Maharashtra-made liquor (MML) is a new low-cost alternative

Read also: Beer and Food Pairing Guide: What to Eat with Every Type of Beer

Final Thoughts

This isn’t just a policy tweak—it’s a structural shift. While the state eyes a significant boost in revenue, both the alcohol industry and everyday consumers will feel the pinch.

Whether this strategy succeeds or leads to unforeseen consequences like increased smuggling remains to be seen. But one thing is certain: the price of your evening drink is about to get a lot heavier in Maharashtra

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