New liquor policy in Andhra Pradesh, Alcohol prices drop to Rs 99!

The government of Andhra Pradesh (A.P.) has declared a new liquor policy (which is scheduled) to take effect on October 12, 2024. This policy permits 3,736 private retail outlets to sell alcoholic beverages, resembling strategies in states such as Haryana. The government anticipates generating approximately Rs 5,500 crore in revenue (from this initiative); however, the new policy represents a significant shift in the state’s methodology regarding alcohol sales.

The administration is concentrating on privatizing liquor sales to provide more affordable options for consumers, particularly those hailing from low-income backgrounds. This policy entails pricing for liquor at Rs 99 or less (which aims to diminish the demand for illegal alcohol).

Furthermore, national suppliers will (be) encouraged to present their brands at these reduced prices. Although the government is hopeful that this new strategy will aid in reversing a decline in liquor sales that has taken place over the past five years, A.P. aspires to position itself among the top three liquor markets in the nation.

The policy will be implemented for 2 years, creating a stable and predictable environment for retailers. This stability is anticipated to draw 1 more investment and participation from private retailers; however, the licensing process will employ an online lottery system. There are four categories of licenses (with fees ranging from Rs 50 lakh to Rs 85 lakh).

Shop owners can expect to earn a profit margin of 20% on their sales, although the state government will also grant licenses to 12 premium shops for a fee of Rs 1 crore, with a five-year license tenure. This new excise policy could open up significant opportunities for larger players in the market, leading to increased investment in the state’s liquor industry.

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