Delhi zonal retailers surrender licences after new policy makes their biz unviable

Around 11 out of the total 32 zonal liquor retailers in the national capital have surrendered their licences because of lower revenue and unfair competition in the market.

As per industry sources, the retailers who have surrendered their licences largely blamed some barriers in the new liquor policy, including arbitrary price fixing, for the non-viability of their business.

Many posh areas of the national capital are now without liquor shops with south Delhi being the worst-hit by liquor shortage.

"The barriers in the new policy and its faulty implementation have led to outlets shutting down across the city. Areas like Cannaught Place, Saket, Green Park and other pasrt of south Delhi are facing the liquor crisis," said a source from the industry.

"While the policy was good, there were faults at the implementation level which led to this pathetic situation," said Vinod Giri, Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC).

Underlining the faults, he said that the number of shops in each zone is high. The policy allowed 27 liquor vends in each of the 32 zones, which is not fair, Giri said.

Secondly, he said the bidding policy also led to heavy financial burden on the shop owners as due to higher number of shops, it didn't prove profitable.

With an average reserve price of approximately Rs 225 crore per zone, the reserve price for these zones added up to nearly Rs 7,000 crore. However, Delhi government earned about Rs 9,000 crore through competitive bidding.

Talking about the new excise policy, Giri said that apart from these barriers, another important factor was the protest staged by the opposition at the time of rollout of the programme.

Because of the protests at several places across the city, the rollout of the scheme was slow, and additionally the vendors were facing losses as they had already grabbed their respective licences through bidding process.

"Due to the new excise verification process added by the government to the already existing rules, the vendors had to bear more losses as it delayed the opening of the liquor outlets," said Giri.

He added that the ongoing discount on sale of liquor is the result of this delay, which ultimately led to huge losses for the vendors after which they chose to surrender their licences.

SEE ALSO :
After energy, media and consumer goods, it's Adani vs Ambani in telecom
TCS says no footprint of recession in the near-term, but deal sizes are shrinking