The Haryana government has introduced a new excise policy that will be effective from June 12, for Increased Liquor Duties.

Under this new policy, consumers in Haryana, including those in the National Capital Region (NCR) city of Gurugram, will see a rise in liquor prices. Specifically, the cost of a bottle of country liquor will go up by INR 5, and the price of a beer will increase by INR 20. This translates to a 20 percent hike in liquor prices in Gurugram. Additionally, the prices of foreign liquors will rise by 5 percent.

For the implementation of this policy, the Haryana state government has successfully auctioned 162 zones with 324 liquor vends across Gurugram East and West through e-tenders. This auction generated approximately INR 1756 crore which marked a 9.4 percent increase over the reserve price set by the excise department. The reserve price is the minimum bid amount at which the government auctions a liquor vend.

Increased Liquor Duties
Image Source: Daijiworld

Increased Liquor Duties and Their Impact on Pricing

Prevent Monopolies Among Liquor Vendors

To minimise the impact of the price hikes, the new policy includes provisions aimed at preventing monopolies among liquor vendors and providing relief to bar operators. Previously, licensed bar operators were restricted to sourcing liquor from two nearby shops, often facing arbitrary pricing from contractors. The new policy, however, allows bar operators to procure liquor from any of three different shops, provided these shops belong to separate licence holders. This change will help to enhance competition and offer more flexibility to bar operators.

Increase in Footfall

Jitender Dudi, Deputy Commissioner of Excise and Taxation (Gurugram West), noted that there could be an increase in footfall at liquor stores with the onset of the wedding season. He told the Hindustan Times, “While most shops remain with previous owners, the policy’s new provisions will enhance market dynamics."

Despite the price hikes, liquor sales have witnessed an increase, with several consumers from Delhi and Noida purchasing liquor from vends in Gurugram. This is potentially due to the comparative pricing advantages in Gurugram.

Objectives of the New Excise Policy

The primary objectives of the new excise policy are to streamline the liquor trade, prevent monopolies, and ensure the availability of quality liquor at reasonable prices. By allowing bar operators to source liquor from a wider range of vendors, the policy aims to set up a more competitive market, benefiting both consumers and businesses.

The government's successful auction of liquor zones and vends through e-tenders reflects a strategic approach to maximising revenue while maintaining regulatory control over the liquor market. The 9.4 percent increase over the reserve price shows the effectiveness of this approach in generating revenue for the state.

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