Hyderabad: The Confederation of Indian Alcoholic Beverage Companies (CIABC) has urged the Telangana govt to allow a supply price revision for alcoholic beverages and has sought a WPI-linked (wholesale price index) price escalation that allows for systematic, inflation-based adjustments as the state does not have a regular annual price review mechanism.
CIABC has also asked the Telangana govt to release the total overdue amount of Rs 2,800 crore (exceeding 45 days) as well as a cumulative interest burden of Rs 400 on the outstanding amount.

Pointing to the sharp increase in production costs across the operational and manufacturing chain since the last price revision in May 2023, CIABC Director General Anant S Iyer said input costs saw a substantial rise, from extra neutral alcohol (ENA), malt spirit, packaging materials to labour, transportation, and other services.
Iyer pointed out that the revenue share disparity severely hit the bottom lines of companies, with the govt taking interim tax increases, which is inhibiting stable organic growth. “Currently, the govt retains over 70% of the maximum retail price (MRP) of alcoholic beverages. In contrast, manufacturers receive only 12-15%, and retailers about 15-18%. While the govt income goes up, supplier companies have to absorb the cost escalation in the absence of an annual review mechanism,” Iyer said.
On the tax burden and impact of the industry being under GST exclusion, he said as the alcoholic beverage sector is outside the scope of GST, companies are not able to claim input Tax Credit (ITC) on GST paid for raw materials, resulting in an additional 3-5% increase in production costs. “The entire Indian made foreign liquor (IMFL) industry seeks a kind consideration of a price revision request of ₹100–₹200 per case for IMFL and a 5% hike for wine products. This would translate to a modest increase of just ₹2.50 to ₹5 per 180 ml bottle,” the CIABC Chief said.
“While the beer industry already received approval for a price hike, spirit and wine manufacturers are yet to receive similar relief, despite facing identical cost pressures,” he added.
Emphasising that the financial viability of the industry is at risk, Iyer said that any further taxation without supply price adjustments could jeopardise the operations of liquor companies.