Policy reforms drive beer sales surge across Karnataka, Jharkhand and Maharashtra

City-based United Breweries Ltd. (UBL) has linked recent state-level policy changes to sharp growth in India's beer market, citing specific reforms in Karnataka, Jharkhand and Maharashtra that have lifted category volumes by as much as 55% in some regions.

Policy reforms drive volume growth

Karnataka's alcohol-in-beverage (AIB) duty structure, which taxes drinks according to alcohol content, contributed to approximately 55% of beer industry growth in the first month after implementation, UBL said. Improved retail availability in Jharkhand supported approximately 55% category growth in H1 FY2026, while reforms in Maharashtra contributed to around 35% category growth during the same period.

Across these markets, UBL has grown faster than the category, supported by its portfolio strength, product-market fit and improved affordability, the company claimed.

Structural fundamentals underpin market

UBL observed that more than 25 million young adults enter the legal drinking age every year, while rising disposable incomes, urbanisation and evolving consumer preferences are supporting category growth. India remains significantly underpenetrated, with annual per capita beer consumption of 2.5 litres compared with a global average of around 25 litres.

While wine and spirits have seen a decline in share of throat of 0.7% points and 0.1% respectively, beer has increased its share by 0.6%.

Tax disparity remains obstacle

UBL pointed out that beer currently faced a 1.3x higher tax burden per unit of alcohol in India compared with IMFL, despite its lower alcohol content. Approximately 65% of the retail price of beer comprises excise duties, creating scope for greater affordability through pricing and volume-based taxation reforms, it urged regulatory bodies and governments.

Vivek Gupta, MD & CEO, UBL, said the company wanted to help create category growth through greater awareness, affordability and availability. With iconic brands, a growing premium portfolio, sharper execution and a future-first approach to technology and productivity, UBL was well positioned to shape and lead the next phase of growth for the beer industry and create sustainable value, he added while speaking at a UBL event in Goa.

Tristan van Strien, Global Director, Investor Relations, HEINEKEN N.V., said India is one of HEINEKEN's fastest-growing volume markets and an increasingly important growth engine for the company. UBL is part of the HEINEKEN Company.

Source: The Hindu