Beer could get 20% cheaper

The government is considering a policy which, if implemented, will make beer cheaper by over 20 per cent in the country.

The proposal includes bringing taxes on beer in line with the global average "" down from the current average of 42 per cent to about 20 per cent. It is also proposed that the fixed component of levies in terms of licence fees should not exceed 5 per cent of the retail price.

This move will come as a major boost to the 110 million cases (12 bottles per case) strong Indian beer market, which is growing at about 15 per cent annually.

The policy also proposes to remove interstate levies and implement free movement of goods between states to enable manufacturers to have economies of scale.

Retail outlets may be given out on a fixed fee and on a long-term basis. This, the government thinks, will remove monopolies, thereby encouraging competition and thus reducing retail consumer prices.

Another big boost for the beer companies will come in the form of a window for advertising. The government may allow advertisements at the point of sale. There is also a possibility of allowing consumption at the point of sale for beer and wine.

There is also a proposal to have uniform retail price for beer across the country, as in the case of other consumer products.

A proposal has also been mooted to allow companies to determine consumer prices on the basis of market forces and free them from government control.

This move by the government comes at a time when beer makers are trying to project beer as a healthier option.

At present, the share of beer in the overall alcohol consumption is just 4 per cent in India, compared to the global average of about 60 per cent.