Andhra’s liquor policy hits sales in Karnataka’s border districts

Liquor sales in Karnataka’s border districts have declined due to Andhra Pradesh’s new excise policy, which offers cheaper and better-quality alcohol. Shop owners are reporting losses, and the state government is assessing the impact on excise revenue and local trade

Bengaluru: Liquor sales in six border districts of Karnataka have recorded a notable drop in the 2024–25 financial year, with Ballari topping the list for the highest decline. According to data, the state sold 705.53 lakh cases of liquor in 2023–24, which rose slightly to 708.85 lakh cases this year, marking a marginal growth of just 0.47 per cent.

Multiple factors are behind this stagnation. The state government’s decision to hike excise duty four times in two years has affected sales, while falling prices for paddy and other agricultural produce have reduced rural spending power.

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However, the biggest blow has come from neighbouring Andhra Pradesh’s new excise policy, which has significantly impacted Karnataka’s border districts.

Districts like Ballari, Chitradurga, Tumakuru, Kolar and Chikkaballapura, which share borders with Andhra Pradesh, have seen sharp drops in liquor business as local customers travel across the border. Andhra’s policy, implemented after the formation of the Chandrababu Naidu-led government, has privatised liquor outlets and allowed over 3,000 new shops to open. Crucially, Andhra offers liquor for as low as Rs 99 per bottle — much cheaper than Karnataka’s prices.

With better quality and lower rates now easily available, many regular customers prefer to buy alcohol in Andhra. Transportation of cheaper liquor into Karnataka has also affected local shop sales, even though it is restricted by law.

Liquor shop owners in Karnataka’s border areas who had earlier shifted their licences closer to Andhra to attract cross-border buyers are now facing heavy losses. Many shop owners, like Vishwanath, who runs a bar near Kolar, say Andhra’s pricing and supply chain advantage have pulled away their steady customer base.

“The new Andhra policy is directly affecting the sales of liquor shops in six key Karnataka districts bordering Andhra. We have sought detailed reports from these districts,” said N Manjunath, Deputy Commissioner, Excise Department, Ballari.

Kolar Excise Deputy Commissioner Sayeeda Azmat Afreen added that in Kolar alone, there has been a 10 per cent drop in sales since Andhra’s new policy came into effect from October 12, 2024. Major drop zones include Mulbagal, Bangarapet–KGF and Srinivaspura areas.

The government is studying this sharp decline as it directly affects Karnataka’s excise revenue, a major source of state income.

With Andhra’s aggressive policy and competitive prices, Karnataka’s border liquor trade is facing serious pressure.