New Delhi, April 13:: Tipplers may have to shell out more for their favourite peg in coming months as increasing cost of molasses in the country is likely push alcohol prices up by as much as 20 per cent.

According to industry experts, lower-end brands in the Indian Made Foreign Liquor (IMFL) category are most likely to be affected by the demand-supply gap of molasses.

"Due to the lesser production of sugarcane in the country this year, we may see around 20 per cent increase in the prices of alcohol," All India Distilleries Association President Devin Narang told PTI.

Molasses, a basic ingredient in manufacturing edible alcohol was being sold at an average price of Rs 2,500 per tonne last year and is now being traded at Rs 3,300 per tone.

He said molasses-based alcohol accounts for over 95 per cent of the total liquor consumed in the country and and surge in molasses prices may impact the price of alcohols. It may force companies to increase the retail price of liquor.

Currently, the low-end IMFL market is dominated by brands such as 8PM, Old Monk and McDowell.

Companies such as United Spirits (USL) and Diageo, however, have so far ruled out the hike in prices of their brands.

USL President Vijay Rekhi, although admitted that demand for molasses has been increasing steadily over the last 3-5 years mainly due to rise of alcohol usage in non-traditional sectors thereby creating a demand supply gap.

"Apart from the Government of India allowing export of molasses and spirit, there had been growing usage of molasses derivatives in petroleum products (ethanol). The consumption of molasses has been growing more than 15 to 20 per cent per annum in the traditional sectors," he said.