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But should one grin and beer it?

Forget the jitters about a global oil price hike. For Mumbaikars, it?s not Mahmoud Ahmadinejad?s threats to cut off Iranian petro supplies.

india Updated: May 10, 2006 21:11 IST
Hindustan Times
Hindustan Times

Forget the jitters about a global oil price hike. For Mumbaikars, it’s not Mahmoud Ahmadinejad’s threats to cut off Iranian petro supplies, but the Maharashtra excise department’s decision to raise levies on bottled beer that has got everyone scrambling. Going by the April 13 circular issued by the excise department, beer prices in Mumbai have been driven up to match that of hard liquor. But like oil, is it a case of beer manufacturers riding a small hike to increase their margins? That seems to be the explanation of those who have issued the circular. Not at all, say both the manufacturers and retailers. All one has to do is read the fine print.

The actual increase in duty is about Rs 10 per 650 ml bottle of mild beer (the most popular variety), which costs Rs 10 to manufacture. But other levies, including octroi, have notched up the price incrementally. Thus, at the end of the pipeline, even with a slightly shrunken margin of profit for manufacturers, the customer has to shell out about Rs 13 more for his lager. Considering that when it comes to such alcoholic ‘relaxants’, most customers pick their beverage of choice according to the price tag, it won’t be a surprise if drinkers — especially young drinkers — shift their allegiance to liquor of comparable price.

One must ask what the logic behind the excise hike is. It surely doesn’t make sense for a government that regularly goes through the motions of preaching the dangers of consuming alcohol. And it also doesn’t make sense for the same authorities who talk of raking in more revenues. So, is the beer price hike a result of an inebriated policy decision?