Liquor Sales in Noida, Ghaziabad, And Faridabad Are Halted By Delhi Discounts!

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According to excise and industry data, Gurugram, Noida, Ghaziabad, and Faridabad, which are Delhi’s neighboring markets, saw a 20–25 percent decline in liquor sales in May after the national capital permitted private shops to give significant discounts on the maximum retail price (MRP) of alcohol. Companies and analysts claimed that because of price parity, consumers from Delhi who had previously purchased from these markets, particularly Gurugram, moved purchases to their city. Delhi opened the market toward the end of last year by allowing private retailers to sell alcohol alongside government-owned stores.

“Delhi was always a major customer, but due to a price difference of at least 15-20%, they purchased their goods from adjacent markets. Since there is no longer a price differential between Delhi and Haryana, the capital’s sales have increased significantly “According to Vinod Giri, director general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), a uniform tax system across states would prevent sales from migrating to regions with lower taxes.

The Delhi government opted to leave the liquor vending sector in November and turned it over to private enterprises, which resulted in substantial price reductions and sizable crowds outside of stores. While this led to the government outlawing discounts in March, private liquor stores were once again permitted to provide customers up to a 25% discount off the MRP a month later.

According to VK Beniwal, deputy commissioner of excise and taxation in Gurgaon, “there is an influence on liquor sales in Gurgaon due to the discounting in Delhi, and we are in touch with the state government to ensure it doesn’t become a motivation for smuggling.” But almost a dozen new stores in Delhi have given up their licenses, citing unfair competition from big wholesalers who were giving greater discounts. Companies, though, showed no signs of concern.

“The industry in the state was on a growth trajectory throughout the test months of the new policy, which was centered on price parity. It made room for new competitors to try their luck in both the wholesale and retail markets. The subsequent withdrawal of certain players and worries about a few regulation changes slowed the pace, but consumer demand held steady “According to Amar Sinha, chief operating officer of Radico Khaitan, the volatility will subside and the supply chain will become more efficient in the months to come.

Additionally, according to representatives of the industry, interstate and black marketing of alcohol have increased. 
For instance, approximately 10,000 bottles of alcohol have been seized and about 100 persons have so far been arrested for carrying alcohol from Delhi to Noida.

“In May 2021, we sold 10 lakh bottles, but in May 2022, that number fell to 8 lakh. In Noida, 9 lakh bottles of alcohol were sold in June of previous year; as of June 15 of this year, only 3 lakh bottles had been sold. Because of the discount provided by the Delhi government, we will fall short of our revenue goal, said Rakesh Bahadur Singh, the excise officer for Gautam Buddh Nagar. He added that there are discussions taking place at the government level to bring rates into parity so that people won’t shop elsewhere. To prevent smuggling, the excise department also performs arbitrary inspections at the Delhi border.

Ghaziabad, a neighboring town, is dealing with a comparable problem. “While June data is not yet available, there has been a significant decline in our revenue from Rs 125 crore in May of previous year to Rs 112 crore in May of this year. We were unable to match last year’s income levels despite the fact that sales were already down due to the second wave of COVID cases, according to RK Singh, a Ghaziabad excise inspector.
The excise policy 2021 was extended up to July 31 but licensees in nine out of 32 zones did not renew their licenses due to different reasons, an excuse department official said. The government held an expensive auction last year for 32 zones’ licenses, each of which allowed for the opening of 27 shops.
Zone 31, which includes the Delhi Cantonment and New Delhi Municipal Council (NDMC), was sold at auction for Rs 315 crore, above the Rs 217 crore reserve price. Zone 19, which included the neighborhoods of Daryaganj, Chhatarpur, CR Park, Sangam Vihar, and Chandni Chowk, sold for Rs 313 crore as opposed to the reserve offer price of Rs 225 crore. The bids were given at an average premium of 20%, with the average bid price settling at Rs 265 crore, according to officials. The reserve bidding price was established at Rs 221 crore.
“The businesses were unable to recoup their expenditures after paying the exorbitant license fees because the new policy’s implementation was put off and stores could not operate until November 2021. This further damaged the market, along with problems with non-conforming wards and unregulated discounts “a company insider claimed.
Many neighborhoods in the city, including Hauz Khas, Laxmi Nagar, Dwarka, Model Town, and Shakurpur, are now without liquor vends as a result of license holders being compelled to close their businesses, they claimed.

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