Beer rates likely to shoot up in AP

Hyderabad: The price of beer might go up if lobbying by manufacturers with the government to revise the price structure succeeds.

In an unusual manner, the government suspended purchase of beer at the old rates for 10 days since October 31. It, however, renewed the contract on Monday for a short period as the AP Beverages Corporation ran out of beer stocks.

The old rates will be in force till the new contract is finalised by the third week of November.

Consumers to pay Rs 7 more per bottle

Suspending the purchase of beer at the old rates for 10 days since October 31 is seen in the liquor industry as a pressure tactic prior to the crucial exercise of enhancing the basic price to be paid to the manufacturer who is likely to get additional revenues of Rs 100 crore.

While manufacturers ha-ve been pressing for a hike of Rs 50-Rs 60 per case of 12 bottles, the government has indicated that the hike will be between Rs 15 and Rs 20. The consumer is expected to pay around Rs 7 more per bottle.

“There has been tremendous increase in the cost of raw materials, which is more than Rs 70 per case, due to hike in power tariff, diesel cost and freight charges,” stated a representation submitted by the manufacturers to the government. The government had not increased the basic price in the past four years from Rs 210.80 per case for lager beer and Rs 235.68 for strong beer.

Recently, the APBCL had invited tenders for new rate contracts from manufacturers and the government. Usually the government extends the old rate contract till the new one is finalised. It delayed extension by 10 days.

Another file relating to removing the special margin burden on retail wine merchants has also been put into circulation. If cleared, it will benefit the retailers to an extent of about Rs 100 crore.

Sources said that excise minister K. Parthasarathy, who had kept the file pending for six months fearing that the state would lose Rs 140 crore following the removal of the special ma-rgin, recently gave his nod.

Retailers are given a profit margin of 25 per cent on beer and 20 per cent on premium liquor. However, due to the levy of the special margin, the average profit comes down to 18 per cent. On the other hand, income-tax is levied on the original margin before clamping the special margin.

The APBCL had recommended to the state government to remove the special margin as the retailers had threatened to proceed legally.