Rising costs, low returns force resto bars to shut shop | delhi | Hindustan Times
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Rising costs, low returns force resto bars to shut shop

In the face of rising costs, even Bacchus is finding it difficult to run a resto-bar in Delhi while inflation keeps his devotees away from his temples. A number of resto bars are shutting shop in Delhi because of rising costs, high licence fee and decreasing revenues.

delhi Updated: Jun 19, 2012 01:01 IST
Neelam Pandey

In the face of rising costs, even Bacchus is finding it difficult to run a resto-bar in Delhi while inflation keeps his devotees away from his temples. A number of resto bars are shutting shop in Delhi because of rising costs, high licence fee and decreasing revenues.

According to excise department officials, 26 resto bars did not apply to renew their licences in 2011. The number has risen to 44 this year. Out of the 486 resto bars in Delhi last year, only 442 have been left running their business. In 2009, only eight such bar owners did not renew their licence. http://www.hindustantimes.com/Images/Popup/2012/6/19-06-pg-07b.jpg

"The business of resto-bars has taken a hit this year as a number of owners claimed that they have been incurring losses and could not sustain business any longer," said a senior Delhi government official.

According to officials, most of the bars that have shut shop are situated in south Delhi.

"We interacted with the owners of these places and some of them said though people visited resto bars, they spent very little on alcohol as it is very expensive," added the official.

A bar needs to get a licence for an eatery to apply for a separate licence to serve alcoholic beverages from the excise department. The licence to run an eatery is issued by the civic agency.

Officials pointed out that renewing the licence for a resto bar entails high cost. For instance a 50-seater resto bar owner needs to pay at least Rs 5.22 lakh, while a 50 to 100-seater installation needs to shell out more than R7 lakh. Those with a capacity of 100-200 have to pay more than Rs 9 lakh for renewal of licence. Most of the licences are renewed before March each year, as after that it requires double the stipulated fee to get the work done.

Apart from the rising costs, the decreasing number of patrons has also hit the business of resto bars. Statistics indicate that increasing number of people refrain from splurging in a bar.

"A glass of wine costs between Rs 350 to Rs 900 in a pub. While a full bottle of wine can be bought at Rs 550 to Rs 700. Price rise has burnt a hole in the pockets of the people, directly affecting the business of these bars," said a senior Delhi government official.

No wonder the number of new resto bars has been on a steady decline.

According to the Delhi government officials, of the 44 resto bars that have not renewed their license some have decided to shut shop while others are serving food and beverages only.