Wine merchants' federation urges CM Siddaramaiah to roll back licence fee hike

Bengaluru: Members of the Federation of Wine Merchants’ Association, called on Karnataka Chief Minster Siddaramaiah at his official residence on Monday, regarding the recent draft notification doubling liquor licence fees. 

The federation submitted a letter to the chief minister, urging the government to immediately withdraw the draft notification dated May 15, which proposes a 100 per cent hike in license fees for retail liquor shops. 

It strongly opposed the unprecedented fee increase, citing data from the last nine years that shows a substantial rise in license numbers without an appropriate growth in liquor and beer sales. 

For instance, between 2016 and 2025, the number of licenses increased, but average monthly sales per shop saw little to no growth — and in some cases, a decline. CL7 (hotels and boarding houses) licences showed the biggest jump from 1,013 in 2016-2017 to 3,125 in 2024-2025.

Data presented by the federation shows that the monthly IML sales have gone down per shop with an average of 485.78 cartons sold per month in 2024-2025 compared to 504.62 per month in 2016-2017. Beer sales, however, have grown to desirable levels, the letter said.

According to the federation, this steep hike in fees will not only burden license holders but also disrupt livelihoods of thousands who depend on the retail liquor trade. They argue that despite a rise in excise revenue — from Rs 591.33 crore in 2016-17 to over Rs 820 crore in 2024-25 — the profitability of individual outlets has declined due to increasing operational costs like rent, salaries and electricity.

The letter says that a 10% profit margin is no longer sustainable and requests the government to allow a minimum of 20% profit on retail liquor sales to ensure viability.

The CM said the demands of the delegation would be discussed with the excise and finance departments.

Excise Minister R B Thimmapur, CM’s political secretary Govindaraju, chief secretary Shalini Rajneesh, additional chief secretary L K Atheeq and other officials were present at the meeting.