Liquor manufacturers object to Delhi government’s excise policy recommendations

By: |
January 31, 2021 8:11 PM

The Delhi government had recently received around 10,000 suggestions on the recommendations of its expert committee on several issues, including opening more private liquor vends and reducing the legal age for drinking from 25 to 21 years.

Liquor manufacturers object to Delhi government's excise policy recommendationsIn a letter to Delhi Chief Minister Arvind Kejriwal, four Indian liquor companies -- Radico Khaitan Limited, Modi Illva India Pvt Ltd, Alcobrew Distilleries India Pvt Ltd and Jagatjit Industries Ltd - opposed any change in free pricing criteria and registration of brands. (Representational image)

Four liquor manufacturers on Sunday raised objections to the Delhi government’s new excise policy recommendations and warned that these would bring in cartelization besides hitting the government’s revenue.

The Delhi government had recently received around 10,000 suggestions on the recommendations of its expert committee on several issues, including opening more private liquor vends and reducing the legal age for drinking from 25 to 21 years.

The excise department of the city government had sought comments and suggestions from the general public on the report of the expert committee by January 21.

In a letter to Delhi Chief Minister Arvind Kejriwal, four Indian liquor companies — Radico Khaitan Limited, Modi Illva India Pvt Ltd, Alcobrew Distilleries India Pvt Ltd and Jagatjit Industries Ltd – opposed any change in free pricing criteria and registration of brands.

The companies claimed that a number of key recommendations were “unhealthy” and would “result in restrictive trade practices”.

While suggesting that there should be no change in the free pricing criteria cut off, the letter stated that the changes will disrupt 80-90 per cent of the Indian-made foreign liquor (IMFL) market.

“The proposed change to registration of brands with retail price of or less than Rs 600 per bottle for 750 ml and the sales volume of 1 lakh minimum in states, except Delhi, among others, is extremely unfair, one-sided and violative of principles of free competition.

“This will disrupt 80-90 percent of the current IMFL market and bring no revenue to the government. It will only create a monopoly of few companies and bring in cartelisation. It will be a big setback to the retail–both corporation and private,” the letter said.

The letter was signed by Radico Khaitan’s vice-chairman and managing director Abhishek Khaitan, Jagatjit Industries’ chief restructuring officer Roshini Sanah Jaiswal, Modi Distillery’s director Abhishek Modi, and Alcobrew Distilleries’ chairman and managing director Romesh Pandita.

The group also opposed the recommendation of closing government-owned vends, saying it would hinder the availability of genuine brands at right price to consumers.

“The consumer is not overcharged or sold non-duty paid/spurious stocks, which is always a matter of concern, especially wherein Delhi is surrounded by three states and the borders of NCR are porous,” they added.

The expert committee had recommended that the government vends be privatised and minimum age to buy/drink liquor also be reduced to 21 from 25 years – in line with cities of Gurgaon, Noida, Faridabad and Ghaziabad in the National Capital Region (NCR).

It had also recommended minimising the Delhi government’s presence in the retail liquor sector and eventually exiting it altogether.

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