## Diageo and Pernod Ricard Challenge Maharashtra’s Liquor Tax Increase
Diageo and Pernod Ricard have filed a legal petition against the Maharashtra government, protesting a recent hike in liquor excise duties targeting the affordable premium segment. Both companies claim that the new classification system unfairly excludes their popular brands from lower-tax categories.
### Background of the Dispute
The Maharashtra government recently revised the excise structure, imposing higher taxes on mid-range liquor brands typically priced between mass-market and luxury products. The policy aims to increase state revenue but has faced criticism from industry players who argue it creates an uneven playing field.
### Companies’ Arguments
According to reports, both Diageo and Pernod Ricard contend that the tax changes are arbitrary and discriminatory. Their representatives argue that the criteria used to define “affordable premium” products lack transparency and consistency.
> “The new excise regime disproportionately affects established international companies that serve responsible middle-income consumers,” stated an industry source familiar with the case.
### Market Impact
Analysts warn that the higher levies could push retail prices up by 15–20 percent, potentially driving consumers toward cheaper unregulated alternatives. Retailers in Mumbai and Pune confirm declining sales in the first month since the change took effect.
### Government’s Position
Officials from the state excise department defend the decision as a necessary measure to balance tax income with social considerations, saying the reform aims to generate additional revenue for public welfare projects.
> “We are ensuring equitable taxation across product categories while discouraging excessive alcohol consumption,” a Maharashtra government representative commented.
### Industry Reactions
The Confederation of Indian Alcoholic Beverage Companies (CIABC) has supported the petition, emphasizing the need for a review of excise classifications that encourage fair competition and market stability.
> “The industry seeks clarity and predictability in taxation, not arbitrary barriers,” said a CIABC spokesperson.
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**Author’s summary:** Diageo and Pernod Ricard challenge Maharashtra’s liquor tax hike in court, arguing unfair treatment and warning of adverse effects on mid-range alcohol sales.
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BW Businessworld — 2025-11-29