Maharashtra Excise Duty Hike: Why Are Sula Vineyards, GM Breweries Stocks Zooming?

The shares of Sula Vineyards and GM breweries rose nearly 13% to 18%, respectively, on Wednesday as the Maharashtra government announced a hike in the excise duties of the state, excluding wine and beer from the increase.

Maharashtra Excise Duty Hike

The Maharashtra state government has hiked the excise duty on Indian-made (IMFL) by more than 50%, which will lead to a significant increase in retail prices by over 60%. This move is expected to push retail prices up.

Additionally, the excise duty has also been imposed on country liquor and imported premium liquor, and their retail prices are likely to rise by 14% and over 25% respectively.

Beer And Wine Excused

However, in a relief to consumers as well as certain manufacturers, beer and wine have been left out of this duty hike.

The state government has also introduced a new category of liquor called Maharashtra-made liquor (MML), which will be exempted from the revised duties.

Additionally, MML brands, which are made from grains, will cost a minimum of Rs 148 for 180 ml and this price has been strategically kept in the existing price range of IMFL to help MML capture the IMFL market.

Why Are Sula Vineyards And GM Breweries Stocks Zooming?

GM Breweries is involved in the activities of manufacturing and marketing of Alcoholic Beverages like Country Liquor (CL) and Indian Made Foreign Liquor (IMFL). It is also the largest manufacturer of country liquor in the state of Maharashtra with a sizeable market share.

Sula Vineyards is primarily involved in the business of manufacture, purchase and sale of premium wine and other alcoholic beverages.

This policy shift has triggered strong buying in these stocks with significant exposure to the beer and wine segment. Investors see this as a positive development for companies like Sula Vineyards and GM Breweries.

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