Excise Reforms Trigger Market Dip for Alcohol Stocks
Breweries and distilleries in Maharashtra face market losses following the cabinet's approval of excise duty hikes. Stocks of major alcohol companies such as United Spirits and Tilaknagar declined significantly. The state introduced Maharashtra Made Liquor (MML), requiring local production and new brand registrations, in an effort to boost revenue.
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The share prices of breweries and distilleries saw a significant decline on Wednesday. This followed the Maharashtra cabinet's approval of changes in the excise department, including a hike in liquor duty aimed at boosting the state's revenue.
Shares of United Spirits dropped 6.63%, Tilaknagar Industries dipped 4.83%, while Allied Blenders and Distillers tanked 4.57%. Additionally, Radico Khaitan saw a decline of 3.30%, United Breweries slipped 0.40%, and Globus Spirits recorded a 0.14% drop on the BSE.
According to the cabinet's directives, the excise duty on Indian Made Foreign Liquor (IMFL) will increase from three to 4.5 times the declared manufacturing cost, up to Rs 260 per bulk litre. Duty on country liquor will rise from Rs 180 to Rs 205 per proof litre. The state has also created a new category of grain-based Maharashtra Made Liquor (MML), designed to be produced by local manufacturers, necessitating new brand registrations.
(With inputs from agencies.)
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