Booze to be dearer, but policy brews cheer if you drink beer

  • HT Correspondent, Hindustan Times, Chandigarh
  • Updated: Mar 31, 2015 11:19 IST

Even as there was significant decrease in the quota and some increase in fees to sell liquor, the Chandigarh excise policy for 2015-16 released

The UT administration wants you to drink less, especially if you are into highend brands. But don’t worry too much if you are fond of beer instead!

on Monday brought some cheer to beer lovers.

Not only has the excise duty on beer been kept unchanged, but microbreweries — that can prepare and sell beer on the spot — have also been given the thumbs up.

The policy — to be effective from April 16, 2015 to March 31, 2016 — says that the idea is to “shift people from hard liquor to liquor with low alcoholic content”.

The annual licence fee for microbreweries has been kept at Rs 2.5 lakh. Microbreweries are already allowed in Haryana and Punjab, though traders believe that clearance from pollution control authorities is a major hurdle in setting up these projects.

Overall, the prices in the higher bands may go up by as much as 15% due to groupwise allocation of vends and increased reserve prices. As licence fee and other levies, especially the assessment fee, have gone up by around 10% drinking at clubs would get dearer.

“The quota has been cut, but we have not increased the duty much. There are differences in rental and other expenses too in Chandigarh as compared to Punjab, so we keep levies lower,” said an official.

Not fully allaying fears of smuggling, the prices in Chandigarh still remain marginally lower than Punjab. The recent increase in Haryana means the city may now be much dearer than Panchkula too, though exact rates would be clearer after the auctioning of vends and figuring in other costs by vendors.

Grouping of vends

The quota that can be lifted by the vendors has, however, been cut from more than 94 lakh proof litres (PL) to 75 lakh PL, which means less liquor in the market and some relief to sellers too as they would not have to overstock. However, the penalty for non-lifting of quota has been increased four times.

At the same time, the number of vends has been cut, as these would be sold in 48 groups, each having 1-5 shops. There would be a total of 100 liquor shops divided into 48 groups, mostly sector-wise.

The revenue target from the reserve price has been set at Rs 135 crore this time for 100 vends, up from the Rs 124 crore of last time for 173 vends. This would reflect as a hike in prices, say traders.

Last year, the vends had been auctioned individually — 123 for Indian made Foreign Liquor (IMFL) and 50 for country liquor — but now the two categories have been merged. Around 50 vends had remained unsold last time due to high reserve price and low profitability.

The idea behind the grouping, according to finance secretary Sarvjit Singh, is to reduce competition within sectors and smaller geographical spaces, “so that no one sells below the minimum selling price”.

But the “clustering” of vends and the higher resultant groupwise reserve price, “would discourage potential bidders and a number of groups may find no takers at all,” remarked Chandigarh Wine Merchants’ Association president Satya Pal.

Another significant point is that the administration says it may “at its discretion” renew licences for the next fiscal (2016-17) on the terms and conditions to be notified at that stage.

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