On June 11, 2025, Maharashtra’s decision to raise excise duties on alcoholic beverages sent ripples through the stock market. While some liquor stocks took a hit, others saw a surge. Let’s break down what happened and why.
The government’s move: a financial necessity
Facing a ₹14,000 crore revenue shortfall, the Maharashtra government approved a significant hike in excise duties on liquor. The excise duty on Indian Made Foreign Liquor (IMFL) was increased from three times to 4.5 times the declared manufacturing cost, up to ₹260 per bulk litre. Similarly, the duty on country liquor rose from ₹180 to ₹205 per proof litre. These changes mark the first revision of excise duty in Maharashtra since 2011.
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Impact on liquor stocks
Stocks that took a hit
Several major liquor companies experienced a decline in their stock prices:
- United Spirits: Fell by up to 7% .
- Allied Blenders & Distillers: Dropped by as much as 6.3% .
- Radico Khaitan: Experienced a decline of up to 5% .
- Tilaknagar Industries: Saw a decrease of up to 3% .
These declines were attributed to investor concerns over increased production costs and potential reductions in consumer demand due to higher prices.
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Stocks that bucked the trend
In contrast, some liquor stocks saw significant gains:
- GM Breweries: Shares surged by 18% to ₹845 apiece .
- Sula Vineyards: Stock price increased by 11.3% to ₹323.55 .
- Som Distilleries & Breweries: Experienced a rise of 4% .
These gains were driven by expectations that the hike in excise duties on IMFL would lead consumers to opt for beer and wine, benefiting companies in those segments.
New category: Maharashtra Made Liquor (MML)
To encourage local production, the Maharashtra government introduced a new category: Maharashtra Made Liquor (MML). This grain-based liquor will be produced exclusively by local manufacturers and is expected to be priced between ₹148 and ₹205 for a 180 ml bottle . The introduction of MML aims to boost local industry and provide consumers with more affordable options.
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Revised retail prices
The hike in excise duties has led to an increase in retail prices for various alcoholic beverages:
| Category | Previous Price (₹) | New Price (₹) |
| Country Liquor (180 ml) | 70 | 80 |
| IMFL (180 ml) | 110–115 | 205 |
| Premium Foreign Liquor | 210–330 | 360 |
| MML (180 ml) | N/A | 148 |
These price increases are expected to impact consumer purchasing behavior, potentially leading to a shift towards more affordable options like MML .
Revenue expectations
The Maharashtra government anticipates that the excise duty hikes will generate an additional ₹14,000 crore annually, contributing to the state’s revenue collection for the 2025–26 financial year.
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Conclusion
Maharashtra’s excise duty hike has created a divide in the liquor industry. While some companies face challenges due to increased costs and potential declines in demand, others stand to benefit from shifts in consumer preferences. Investors should closely monitor these developments to make informed decisions in the evolving market landscape.
