Although four and half months have passed of the Supreme Court’s ban on liquor sale within 500 meters of national and state highways, the liquor industry has not able to recover from this stroke of justice. To make matter worse, companies have to deal with a new challenge of mitigating the impact of the goods and services tax (GST).
In Bengaluru , more than half of some 30,000 liquor vends that downed shutters on April 1 after the Supreme Court banned sale and serving of alcohol within 500 metres of state and national highways still remain shut, keeping the booze industry under pressure.
Spirits firms, which had initially expected most liquor shops and bars to either relocate or reopen in few months, now say the situation may normalise only by next year.
While the top court last month allowed authorities to denotify state and national highways passing through municipal limits to let liquor vends along highways in cities and towns resume business, many such outlets are still waiting for highway denotification orders and renewed licences.
Up to 15% of retail outlets could be lost forever as a result of this transition, although over time this supply will be replaced by alternatives, said the maker of Royal Challenge, McDowell’s No. 1 and Antiquity whiskies. Others agree.
In the last two months, Punjab and Haryana governments denotified highways running within the city limits. In some states, however, the proposal is pending.
Karnataka — one of the top markets for liquor consumption — has sent a proposal to National Highway Association of India to denotify nearly 1,500 km of state highways that has about 700 liquor vends.
West Bengal, Jharkhand and Chhattisgarh — which account for a fifth of the total alcohol consumption — are looking to control liquor retail trade themselves, prompting private players to down stock. Yet, companies are hopeful even as it is becoming difficult to predict growth in the next few quarters.
The number of shops that have managed to relocate or reopen after the highway ban varies state by state, he told investors after the results. For example, the recovery rate for points of sale in Himachal Pradesh stands at 43% while in Uttar Pradesh as many as 77% points of sales have reopened.