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Apex Court decision- Effecting Shimla liquor business

Liquor at one time considered to extremely lucrative profit business, seems to be losing its sheen now after being impacted by the recent Supreme Court decision. The apex court in its well intended decision closed all liquor sales outlets on the national highways. As per the court direction these outlets have to be a minimum of 500meters away from the national highway.

This came to light on Tuesday. The state excise of Himachal Pradesh, in pursuit to not let go of its yearly revenues from this business significantly increased bid prices of some outlets which will sell liquor, assuming that sale at these outlets would swell due to the NH ones being closed. Also the department increased on other charges like security amount, etc. But to surprise none of the liquor contractors participated in the bid, stating that the decision was unprecedented and could turn out unviable for their business.

Quoting an example,” the outlet at Panchayat Bhawan Shimla, which was a little more than four crores last year, is now being sold at fifteen crores approximately,” stated a Liquor contractor. He rued that the state excise is neither trying to facilitate them 500meters near the highways, nor are they letting go on the yearly revenue they earn from the business. Whereas due to the court decision sales is bound to go down. Adding he said, if a contractor has budgeted four crores for his coming year’s bid , then how can he spend fifteen crores on that same deal. “Especially when no market survey has been carried out, as to how much increase of sale would be effected at his outlet because of the NH outlet being closed.” He said it is possible that beyond assumption sale of any X outlets would increase significantly and this Y outlets could suffer losses instead. “So it is totally out of question to buy this aspect of doing business, unless it is justified scientifically”, he added.

Other liquor contractors also informed that though refraining from the liquor auction was not a deliberate move, but it so happened, because everybody thought that if they bid on such increased prices, then earning profits would virtually become impossible.

On the other hand Joint commissioner of the state excise department Rohit Chauhan stated though not based on any market survey but on simple mathematics, the quotas of the closed NH outlets are now being transferred to the other outlets of the same area which will still run, which has increased their prices. He says sale of liquor would not be that badly affected due to the apex court’s decision. Adding that if somebody likes to consume any form of alcohol would now travel 500 meters away from the NH to fetch the same.

He said liquor contractors are being over skeptical about the changes, though there is nothing to be worried about. Adding that they have now announced another date for the bidding, and are extremely hopeful that by that date all ambiguities would be sorted out and contracts would be awarded.

However some consumers still assume that if the rift between both continues for some more time, then they, who are already paying higher that the Maximum Retail price (MRP) and getting looted might have to suffer further. Even the illegal liquor marketers would see handsome opportunities in this scenario, as in such short period of time government backup plan might not work very well, added some consumers.

 

Wine and liquor shop

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