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U.P.’s ‘franchise fee’ policy invites global liquor brands to the party
Uttar Pradesh, with a population equivalent to that of Germany, United Kingdom and France has embarked on an ambitious excise policy for 2024-2025, one which has incorporated a rather novel ‘franchise fee’ model to encourage top global labels to enter into a franchise-based fixed fee relationship and co-produce brands with the state’s distilleries.
Lucknow: How about global liquor, beer brands, made and bottled in the most populous state?
Uttar Pradesh, with a population equivalent to that of Germany, United Kingdom and France has embarked on an ambitious excise policy for 2024-2025, one which has incorporated a rather novel ‘franchise fee’ model to encourage top global labels to enter into a franchise-based fixed fee relationship and co-produce brands with the state’s distilleries.
“It means that we want to have the best of foreign liquor made in UP. While this would of course mean more variety for the consumers, it will also help us raise revenue,” the state’s excise commissioner Senthil Pandian C said on Wednesday.
On Tuesday, the UP cabinet cleared the excise policy for 2024-25 through which it expects to mop up ₹58,000 crore revenue.
“If a particular brand being produced in franchise model starts getting more popular and its demand grows then if the capacity of the distilleries has been exhausted, for a year they will be allowed to purchase foreign liquor and increase bottling capacity too. This model will help us fetch more revenue,”he said.
As already reported by HT, the state government has given a big relief to beer vends by allowing people to consume the brew, provided the vend owners have 100 square feet area next to the shop.
“The beer export fee has been reduced by 50 paise per litre so that beer exports may be further promoted in the state,” the excise commissioner said.
He said the facility of “permit rooms” where beer could be consumed immediately on purchase would also reduce hooliganism on the streets and the need for people to have it on the sly. An annual fee of ₹5000 would be levied on beer vends wanting to avail of the “permit room” facility.
The excise commissioner said the state government, was conscious of the need to not increase prices of countrymade liquor.
“That is why we have now decided to limit the various categories of countrymade liquor to four, instead of the nine that exist now. Controlling the liquor pricing would be our policy to push for grain-based countrymade liquor,” he said. The excise official explained that the demand for grain-based alcohol had gone up globally and that was why it was being promoted in the state.
“Earlier grain-based countrymade liquor was largely imported from Punjab and Haryana but now these are being produced in the state. This is of course helping by saving on import duty and reducing GST. The fact that we have come up with a policy to introduce a license fee of ₹254 per bulk litre and the regular 10 percent increase in minimum guarantee quota (MGQ) means that we will earn on revenue without increasing prices,” the official said.
He explained that due to these steps, the price of grain-based countrymade alcohol with 42.8-degree liquor intensity (called Uttar Pradesh Made Liquor or UPML), priced at ₹90 at present, would be reduced by ₹5. The new category of grain-based countrymade liquor with 36 percent liquor intensity would be kept at ₹75. The prices of molasses-based countrymade liquor have been fixed at ₹50 (25-degree intensity) and ₹70 (36- degree intensity).
The UPML would be available in glass bottles as well as tetra packs.
