Delhi govt ends discounts on liquor to stop queues at stores; all you need to know

The Aam Aadmi Party-led Delhi government discontinued discounts / rebates / concessions on the MRP of liquor in the Union Territory to prevent large crowds outside shops. The decision comes after liquor shops in Delhi witnessed long queues as retailers offered massive discounts to increase sales.

An official notification from the Delhi government's excise department stated, "It has been brought to the notice of the department that as a result of the discounts being offered by the licences 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 of an area." It added, "It is also to be kept in mind that the Covid situation is not yet over and the danger of COVID-19 still persists and therefore, the huge crowds are likely to aggravate the rise in cases in Delhi."

The Delhi government, in its Monday notification, also recognised that offering a discount on the MRP of liquor was leading to "unhealthy market practices deployed purely for short-term business gains by some licencees". It said, “Licensees are seen indulging in various promotional activities through social media and banners / hoardings being placed outside the stores which is a non-permissible activity under the Delhi Excise Act, 2009 and Delhi Excise Rules, 2010... This was not the intent while allowing discounts under the new excise regime."

The move has come as a big blow to liquor shop owners who have been offering heavy discounts on MRP -- up to 35 percent on certain IMFL brands -- to exhaust their existing stock by the end of March when liquor licenses are up for renewal.

Under the new policy, Delhi's excise department had decided to give licences to 849 liquor vends -- each having an area of at least 500 square metres. Till January 28, a total of 552 liquor shops were given licences. Also, a price cap was set for each liquor brand -- rates were capped for over 505 liquor companies -- and retailers were free to charge anything within that MRP.

Following the implementation of the new excise policy in Delhi in November, retailers adopted a competitive pricing model and offered up to 30-40 percent discount on imported brands. Subsequently, liquor stores in several areas of Delhi started witnessing long queues of tipplers. Even longer queues were seen outside the stores located closer to border towns in Haryana and Uttar Pradesh.