‘Crowds causing law, order problem’: Govt disallows all discounts on liquor

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The state government on Monday ordered the discontinuation of all discounts and offers on the retail sale of liquor, a decision it said was taken due to instances of overcrowding in and around shops, which were causing “law and order” problems.

In an order issued on Monday evening, state excise commissioner Arava Gopi Krishna said discounts on the retail sale of liquor are being discontinued due to overcrowding, as well as because licensees were indulging in “unhealthy market practices”.

“…. All L7Z licensees shall neither give concession, rebate or discount on the MRP of liquor and hereby directs all L7Z licensees to strictly abide by Rule 54(3) of the Delhi Excise Rules, 2010,” said the order.

L7Z is the license for retail vend of Indian and foreign liquor.

The order comes at a time when Delhi is headed for a crucial elections to the three municipal corporations next month and the Bharatiya Janata Party (BJP), which currently governs the civic bodies,was set to launch a campaign against the new excise policy.

The BJP has alleged that liquor shops were being opened near schools, places of worship and residential areas, and party functionaries have also shut several such stores over the past few weeks.

The Delhi government has maintained that due to the new excise regime it has stopped theft of about 3,500 crore in the city’s liquor network which earlier used to go BJP leaders. In January, deputy chief minister Manish Sisodia told the assembly that the Delhi government has closed 3,977 illegal liquor shops in Delhi.

The order also marks a departure from one of the essential facets of Delhi’s new excise policy, which came into effect on November 16 last year. Liquor retailers in the city were, for the first time, allowed to sell bottles at a discount, or with offers, unlike the previous regime, where liquor could only be sold at the price prescribed by the state excise department. This had pushed customers to Gurugram, where discounts on liquor are par for the course, leading to Delhi losing business to its neighbouring state.

Once the new excise regime came into effect, the Delhi government set the maximum retail price of each liquor brand and its make, and retailers were free to charge anything within that limit.

Several stores in the city have, especially over the past month, offered a wide range of discounts (of 35% in some instances, while some stores handed out buy-one, get-one offers on some brands), with instances of crowding reported in several areas.

Reversing this decision, the order said the state will take penal action if any retail licensee is found offering discounts on liquor.

“It has been brought to the notice of the department that as a result of discounts being offered by the licenses through their retail vends, there are instances reported of large crowds gathering outside the liquor stores leading to law and order problem and causing inconvenience to local population… It is also to be kept in mind that the Covid-19 situation is not yet over… and therefore, the huge crowds are likely to aggravate the rise in cases in Delhi,” said the order.

On February 14, the excise department warned liquor store owners that it would revoke their licenses if they were not able to control the rush of customers inside and outside their shops.

The excise commissioner also said the department has noted that some licensees were promoting their stores on social media and banners or hoardings outside the stores, both of which are not allowed under the Delhi Excise Act, 2009 and the Delhi Excise Rules, 2010.

“It has also been reported that such discounting is leading to unhealthy market practices deployed purely for short term business gains by some of the licensees and is leading to distortions of the market. The intent of the government in regard to discounting was to promote consumer choice and healthy competition and determination of price by market forces. The discounting of this nature was not the objective of the government while permitting the discounts in the new excise regime,” the order stated.

Residents of the city were, however, unhappy with the order and criticised the Delhi government for not having thought through such aspects while drafting the policy.

A zone licensee, who asked not to be named, said the vendors have no option but to follow the government order. “The government has taken all the money upfront. It earned over 9,000 crore instead of 6,000 crore at one go through the new regime. Now, it’s changing rules as per its convenience. With this, the retail pricing mechanism will go back to as it was before the new excise policy. Liquor will now be sold only on MRP at all private vends from now.”


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