Stores can offer 25% discount on liquor as Delhi govt eases norms

The permission to offer discounts is likely to give a boost to the liquor business in the national capital as it will significantly reduce the price difference versus Haryana, said traders.

Liquor stores in Delhi have started offering discounts again on Saturday, a day after the government permitted them to offer up to 25% rebate.

A wine shop notifies discount on alcohol prices, at New Delhi Railway Station, on Saturday. (Sanchit Khanna/HT)

The Delhi government had disallowed discounts and promotional offers on February 28 after a rush of buyers led to unruly scenes and overcrowding at retail outlets in violation of Covid guidelines.

“The government has reconsidered the decision and directed that discounts/rebates/concessions up to 25% of MRP (maximum retail price) shall be allowed on the sale of liquor in the jurisdiction of the NCT (national capital territory) of Delhi with strict compliance of Rule 20 of the Delhi Excise Rules, 2010,” excise commissioner Arava Gopi Krishna said in the Friday order. Rule 20 caps the sale of liquor to an individual at nine litres.

The discounts were discontinued at a time when Delhi was likely to hold municipal polls in April. However, a law has now been passed in the Lok Sabha to merge the capital’s three municipal corporations, which entails redrawing of municipal wards from the existing 272 to 250. This has effectively postponed the polls by at least a year.

The Bharatiya Janata Party, which currently governs the three municipal corporations, has been campaigning against the new excise policy in Delhi that allows for deep discounts.

A liquor trader, who runs multiple stores in south Delhi, said a flat 25% discount is being offered on all brands of liquor and on imported and local beer in his stores.

“We got posters and graphics made and have placed it for promotions. All discounts we are offering are as per the new order of the excise department,” said the trader, who did not want to be named. Another trader said he is planning to offer “buy three, get four bottles of beer” as demand for beer shoots up during summer. He too declined being named.

The permission to offer discounts is likely to give a boost to the liquor business in the national capital as it will significantly reduce the price difference versus Haryana, thus plugging sales and revenue loss for Delhi, according to Vinod Giri, director general of Confederation of Indian Alcoholic Beverage Companies, a lobby group.

It will also make liquor cheaper in Delhi compared with Noida and Ghaziabad.

The government permitted discounts on liquor prices for the first time in February under the new excise policy that came into force in November last year. The deep discounts offered at various liquor vends saw a rush of buyers and led to complaints by local residents.

The February discounts led to sales of 24.50 million litres of liquor in the capital, almost double the average monthly sale of 13.2 million litres in 2019-20, according to an affidavit submitted by the Delhi government in the high court.

The discontinuation of the discounts caused a dip in sales. A bunch of pleas was filed by liquor vendors in the Delhi high court challenging the government’s order to do away with the discounts. The petitioners contended that their sales have dipped due to the decision and people were rushing to the neighbouring cities for cheaper liquor.

Under the new excise policy, Delhi government has exited the liquor business in the capital and the liquor business has been handed over to private players. The city has been divided into 32 zones, which have been allocated to different bidders through open tenders.

The Delhi government is preparing a Delhi Excise Policy 2022-23 in the next two months, officials said. The excise department in the meantime has extended the liquor trade licences of all private vends till May 31.

“The Delhi excise policy explicitly envisages free market and permission to discount. It was also a material assumption on which retailers had based their bid amounts,” Giri said. “Hence, the decision to allow discounts up to 25% is a welcome first step towards restoring normalcy, which would be permission to discount as the retailer wishes. Besides benefitting Delhi consumers, discounts also reduce price arbitrage vis a vis Haryana and help plug Delhi sales and revenue leakage.”