Overview

• The Karnataka government implemented a 50% hike in annual distillery licence fees from July 1, 2025, after scaling down an earlier proposal to double the rates.
• The new structure extends licence renewal periods from one year to five years and sets fees based on area population, with metropolitan corporations paying up to Rs 9 lakh annually.
• Officials project the increase will generate an additional Rs 300 crore in yearly excise revenue, marking the first fee revision since 2016.
• Small distilleries and craft breweries, including Huli Brewery, say the uniform hike undermines profitability and are evaluating relocation to Andhra Pradesh, Goa or Maharashtra.
• Industry representatives warn that repeated excise duty and licence fee increases risk stifling investment and slowing growth in Karnataka’s liquor sector.