Country liquor manufacturers are expecting a spike in prices in Bengal following amendments to the excise rates which come into effect from September.

The changes are a precursor to further amendments in foreign liquor excise rates, expected ahead of the festive season to boost dwindling sales. The rates will be based on the new excise structure introduced amid the Covid pandemic.

Industry sources said country spirit prices could rise 20 per cent — which means the price of a 600 ml bottle could inch up to Rs 120 from Rs 100 taking it closer to beer prices, prompting a section of manufacturers to re-evaluate their product strategy. Captain, Bengal Tiger, Dada are among the popular brands in the segment.

“We will now have to look at the foreign liquor segment. But it is very tough for the country liquor players who are mostly local operators to take on the top foreign liquor brands well established in the segment,” said a senior executive of a country liquor manufacturer with plants in Bengal.

“As licensees we will comply and act as directed by the excise department. We are certain that the new pricing will serve the interest of the state revenue and be beneficial to all,” another manufacturer pointed out to a query from The Telegraph.

Country spirit is not a small category by any means in Bengal. It contributes around Rs 3,000 crore to the state exchequer and has consistently constituted around 30 per cent of the overall net excise proceeds of the state.

The state has estimated its contribution to the net excise proceeds to increase to 35 per cent in 2021-22 with an estimated net earnings of Rs 5,605 crore.

The change according to industry sources while affecting the country liquor prices could be introduced to strike a balance with any revenue forgone from a probable tweak in the rates in the foreign liquor category to boost volumes.

Bengal’s share in national IMFL sales in 2020-21 had contracted to 3.3 per cent against 4.2 per cent previous year.

This was on the back of several factors — introduction of an additional duty of 30 per cent which was subsequently scrapped with a new slab that eventually inflated foreign liquor prices in the state by 40-90 per cent. The other factor is lockdowns in the first wave affecting sales.