Delhi puts out tenders for new liquor retail licences
The Delhi government on Monday floated tenders for appointing new licensees for retail sale of liquor in the national capital, paving the way for a range of sweeping reforms to boost the city’s revenue, to crack down on the liquor mafia and improve user experience under the new state excise policy, documents seen by HT showed.
Under the Delhi Excise Policy, 2021, the city has been divided into 32 zones and allotment of licenses will be on a zonal basis. On Monday, the state excise department issued e-tenders for stakeholders to apply for L-7Z and L-7V licences which are meant for retail sale of Indian and foreign liquor (except country liquor) in Delhi. The department floated 32 e-tenders, one for each zone.
“With these tenders, we can say that the city administration has formally started the process of bringing in liquor reforms in Delhi. The Delhi government’s objective is to allow responsible players of the industry to carry out trade transparently without resorting to any proxy model. It aims to ensure equitable access to liquor supply to all the wards or areas of Delhi so that there are no areas with no shops or few sellers,” said a senior government official on condition of anonymity.
Under the new policy, business hours have been fixed at between 10am to 10pm, while those at the airport may open round-the-clock. The government has kept the annual reserve licence fee (which will subsume all existing taxes and other charges) for the 30 zones under the three municipal corporations between ₹220-228 crore per zone. For the 31st zone, which is the NDMC and Delhi Cantonment Board area, the fee will be Rs217 crore, while the zone 32 (airport zone), will have an annual reserve licence fee of ₹105 crore, the document showed.
However, liquor retailers in the city said the government has floated the tenders without making the final Delhi excise policy document public. “While the tender document claims that the new excise policy has been approved by the Delhi government, we could not find the document anywhere on its website. It is expected to be made available tomorrow. In the absence of the Delhi Excise Policy, 2021 being made public, potential bidders like us want more clarity on the license regime such as fixation of MRPs, rate of VAT/excise see subsumed, retailer margin, etc,” said Naresh Goyal, a retailer licensee and president of Delhi liquor traders association.
The tender documents stated that bidders will have to pay a non-refundable fee of ₹10 lakh and an earnest money deposit (EMD) of ₹30 crore, if applying for one zone; and ₹60 crore, if bidding for two or more zones. The pre-bid meeting has been scheduled for July 6. Until now, the EMD was ₹8 lakh. Officials said by increasing the EMD amount manifold, the government wants to ensure that only the big and premium players get involved in Delhi’s retail liquor trade, and curb proxy ownership, brand pushing and corruption.
However, this does not mean that the existing retail vends or retail licences will become invalid. On June 10, the excise department extended licences of all retail liquor vends in Delhi for three more months till September 30. It stated that all licences are being renewed as per the existing rules for now because “the government of NCT of Delhi has approved the new Excise Policy 2021-22, which is likely to be implemented in the next three months”. Rather, the existing retailers will also be able participate in the tender and may bid for any zones, said the official.
The tenders are also significant because as per the new excise policy, the Delhi government will completely exit the retail sale of liquor. So, all existing retail licences — L6, L6FG, L6FE — will not be renewed as these were meant for government liquor vends. However, country liquor vends will operate till the new country liquor policy is framed.
Delhi has 849 liquor stores, of which 276 are run by private entities. The rest are run by the state government. Under the new policy, the government will keep the total number of vends intact, reshuffling them to ensure a more equitable distribution across 272 municipal wards in the city, the New Delhi Municipal Council area and the airport, which has been classified as a ‘special zone’.
“Any private legal entity or individual who has proof of filing Income Tax Returns for the last three years (2018-19, 2019-20 & 2020-21) is eligible to participate in the bid. The entity willing to participate in the tender for retail vends in one zone should have a net worth of at least ₹6 crore, and of at least ₹12 crore for more than one zone. No manufacturer or wholesale (L-1) licence holder will be eligible to bid for retail zone/vend or vice versa. Similarly, the retail licence holder should not have any manufacturing facilities/distilleries/breweries/in India or abroad either directly or through any sister concerns/related entities,” the documents stated.