Liquor shops in the Capital will soon be able to offer discounts as a new excise policy that removes price controls in the retail alcohol trade kicks in, senior government officials said on Wednesday, enabling festive season offers of the kind that are usually seen around Diwali on vehicles, electronics, and gift items.
HT on Tuesday reported that the Delhi government has floated tenders for new licensees for liquor retail, paving the way for a range of sweeping reforms to boost the city’s revenue, crack down on the liquor mafia, and improve user experience. The new policy also reduces the legal drinking age from 25 to 21, although this can be implemented only after it is passed in the Delhi assembly.
“We are expecting gradual implementation of the Delhi Excise Policy, 2021 from October. Moving in that direction, this week, tenders have been issued for retail licenses in all the 32 newly created zones of the Delhi. Once the licensees are appointed, the next step will be to fix the rates of the all the varieties of alcohol including their brand registration,” said a senior excise official on condition of anonymity.
The official said the department is aiming to roll-out the revised policy with its new pricing mechanism and customer experience norms from this festive season.Diwali this year falls on November 4. The existing retail licensees have been given an extension to operate till September 30.
At present, it is illegal to give any rebate, discount or concession on the retail sale of liquor in Delhi — a policy that led to an increase in non-duty paid liquor and illegal bootlegging from neighbouring Gurugram, and military canteens.
By opening up the market, the Delhi government is hoping to increase its annual revenue by ₹1,500-2,000 crore from the existing ₹6,500 crore earned annually as excise income.
The new excise policy says that, after completion of the tendering process, the L-7Z licensees (retail licensee of every zone) will be given two weeks time to submit their inputs regarding a maximum retail price (MRP) to the excise commissioner.
“The excise commissioner will fix the MRP for each product after taking into account the inputs from L-7Z and L-7SP1 (super premium vends) licensees, and the price of the product in the neighbouring states i.e Haryana, Uttar Pradesh, Punjab and Rajasthan. The excise commissioner will also provide an opportunity of being heard to each L-7Z and L-7SP1 licensee,” read the final policy document prepared on May 31 that HT has reviewed.
It further states that a similar process will be followed at the time of introduction of new brands during the course of the year. “The licensee is free to give concession, rebate or discount on the MRP,” the policy said.
A retailer who operates liquor stores in one of the zones in Gurugram said the city witnesses higher sales compared to Delhi or Noida because retailers are allowed to offer discounts as per the market forces.
“In Gurugram, liquor retailers usually offer huge discounts around February and March every year as they are the closing months of the financial year, and licensees have to renew their permits which happens on an annual basis. So, every owner tries to sell their remaining stocks of that financial year at throwaway prices. We also give lots of festive offers around Diwali and the New Year’s Eve. All this is possible only because the pricing of liquor in Gurugram is left on the market forces and is not decided by the government as such,” he said.
In Delhi, each bottle of liquor is sold on MRP, and no discounts can be offered even if a retailer wants to because it gets detected under a bar-coding system. “Soon, things will change for the better in Delhi. While a maximum retail price will be fixed, there will be no cap on the minimum price so as to allow consumers to reap benefits of the new pricing mechanism,” a second excise official said.
Delhi currently has 849 liquor shops. These, however, are not equitably distributed across the city. The government plans to keep the total number of vends intact, reshuffling them into 32 zones to ensure a more equitable distribution across 272 municipal wards in the city, the New Delhi Municipal Council (NDMC) area and the airport.
Excise minister Manish Sisodia did not respond to requests for comment.
Shriparna Saha, a media professional, said, “The thing with Gurugram wine and beer shops is that they are well lit and appear to be safe for women, with decent variety [of liquor]. The price is also less compared to Delhi and Noida. However, owners often charge any price they want to and refuse to sell by the price printed on the bottle. So, I hope Delhi learns the right lessons from its neighbouring city and ensures customers are not fleeced,” she said.
Vinod Giri, director general of the Confederation of Indian Alcoholic Beverage Companies said Delhi’s new excise policy is an attempt to simplify the city’s liquor market, remove unwarranted preconditions to operate, do away with inexplicable bias for imported products and create a market centric level playing field.
“We had urged the Delhi government to take steps to ensure monopolies are not created in the retail space of liquor. We are glad to note that the city administration has inserted measures to prevent such occurrences. Allowing retailers to run promotions and enhance value for consumers like in other consumer products was a long-pending demand of industry stakeholders. We are hopeful that it will benefit customers and increase sales in the city,” he said.