June 29: Although the Delhi Excise has still not clarified the new policy, it has shown exemplary urgency for collecting the revenues as it floated the eTenders for retails sales for liquor in the Capital through tenders for L-7Z and L-7V licenses for Indian and foreign liquor on Monday, while ensuring that the old licensees can operate till 30 September, writes Subhash Arora who expects an Oligopoly-like situation in Delhi, giving business in the hands of the big operators from India
Under the new policy the city has been divided into 32 zones and allotment will be on zonal basis, according to the Report in the Hindustan Times . One is still not clear about the sweeping reforms the government promises, except that like Haryana, it will ensure advance and assured tax collection from the chosen few.
The government claims that it has started the process of reforms with the new policy which sees the government withdraw from retail selling liquor. According to a senior official, ‘with these tenders, we can say that the city administration has formally started the process of bringing in liquor reforms in Delhi. Our objective is to allow responsible industry players to carry out the business with transparency without resorting to any proxy model. It aims to ensure equitable access to liquor supply to all the wards or areas of Delhi so that there are no areas with no shops or fewer sellers.’
The department has floated 32 e-Tenders, one for each zone. The annual reserve licence fee for 30 zones under the three municipal corporations has been set at Rs 220-228 Cr for each zone. For the NDMC and Delhi Cantonment Board area, the fee will be Rs 217 Cr, while the zone 32 (airports) will have an annual reserve licence fee of ₹105 Cr.
Store opening has been fixed at 10am- 10pm, except the airports which may remain open 24*7. But liquor retailers complain that the government has floated the tenders without making public the final policy: one could not find the documents listed on its website. Bidders have no clarity on the license regime such as fixation of MRPs, rate of VAT/Excise, retailer margin, etc,” said Naresh Goyal, President of Delhi Liquor Traders Association. The draft Policy documents had mentioned details but the traders are awaiting final gazetted policy which is expected to be made available tomorrow (Wednesday).
According to the tender documents, bidders must pay a non-refundable fee of Rs. 1 million (10 lakhs) and an earnest money deposit (EMD) of Rs. 30 Cr, for each Zone. This fee will be Rs. 60 Cr, if one bids for two or more zones. The current EMD being Rs. 800, 000 for each store, the increase is a mind boggling 375 times (the multiple number of shops in a zone, notwithstanding). Although it might possibly set the retail prices soaring on all alcoholic products including wine, the government officials can happily visit the Gandhi Samadhi and tell Late Mahatma Gandhi that the increase in the retail prices will only help reduce alcohol consumption and the government should be lauded for taking Delhi closer to prohibition.
Officials claim that by increasing the EMD amount manifold, the government wants to ensure that only the big and premium players get involved in Delhi’s retail liquor trade, and curb proxy ownership, brand pushing and corruption which according to Studies was the mainstay for government-owned shops.
Delhi has 849 liquor stores, of which only 276 are run by private entities. The closed 573 government shops will be shifted to the private sector and each zone will have an equitable share of these 849 stores. The country liquor vends will operate till the new country liquor policy is framed.
The existing retailers will also be able participate in the tender and may bid for any zones, provided they meet certain basic requirements. However, manufacturers or wholesale (L-1) licence holders will not be eligible to bid for retail stores or vice versa. The total number of vends will be kept the same (849) though reshuffling will be done from one zone to another to ensure a more equitable distribution across the 272 municipal wards in Delhi, NDMC and the special zone of airports.
There is still no official news about the licenses being renewed for department stores selling wine and beer which was one of the more progressive steps taken by the government. These licenses were cancelled in 2019 due to mismanagement by some department stores that went apparently unchecked under the very noses of the government.
The pre-bid meeting has been scheduled for July 6. Watch out for this space for more news.
(The above news was syndicated from www.indianwineacademy.com by Subhash Arora)