GM Breweries, Sula Vineyards shares jump up to 18% today; here's why

Shares of Maharashtra-based G M Breweries Ltd and Sula Vineyards Ltd climbed up to 18 per cent in Wednesday's trade after the state government introduced a new category of grain-based Maharashtra Made Liquor (MML), to be produced exclusively by local manufacturers. MML brands will require new registrations. United Spirits shares were trading 6 per cent lower as a hike in duty on liquor was announced by the Maharashtra cabinet. 

Shares of GM Breweries, the largest manufacturer of country liquor in the state of Maharashtra, rose 18.05 per cent to hit a high of Rs 846. Sula Vineyards saw its shares climbing 12.07 per cent to Rs 332.85, as wine and beer were excluded from the duty hikes.

United Spirits fell 6.42 per cent to hit a low of Rs 1,507 on BSE. Radico Khaitan Ltd declined 1.41 per cent to Rs 2,616.50. Som Distilleries & Breweries was up 3.93 per cent at Rs 158.59. Tilaknagar Industries Ltd fell 1.92 per cent to Rs 353.20. Shares of United Breweries Ltd were up 1.5 per cent at Rs 2,096.15. 

According to the decision, the excise duty on Indian Made Foreign Liquor (IMFL) will be increased from three times to 4.5 times the declared manufacturing cost, with a maximum cap of Rs 260 per bulk litre. The duty on country liquor will also be raised, from Rs 180 to Rs 205 per proof litre. Beer and wine have been left out of the hike. 

The revised minimum retail prices for 180 ml bottles have been set at ₹80 for country liquor, Rs 148 for mild liquor (MML), Rs 205 for Indian Made Foreign Liquor (IMFL), and Rs 360 for premium foreign liquor, PTI reported.

Additionally, the Cabinet has allowed FL-2 and FL-3 licence holders—covering sealed bottle and on-premise consumption sales, respectively—to operate through conducting agreements. These will be subject to an additional annual licence fee of 15 per cent for FL-2 and 10 per cent for FL-3.

According to the release, FL-2 and FL-3 licences—covering sealed bottle sales and on-premise consumption, respectively—can now be operated through conducting agreements, with an additional annual licence fee of 15 per cent for FL-2 and 10 per cent for FL-3.