Liquor cartel’s hold broken, way paved for entry of new players

With money power and political protection, the syndicate grabbed a majority of liquor shops in biddings.

The Uttar Pradesh government has decided to break the hold of the liquor cartel and paved the way for the entry of new players in the liquor trade by opting not to renew existing licences under the excise policy for 2025-26.

The BSP government had entrusted the responsibility of handling the liquor trade in the state to UP State Sugar factories Federation (UPSSFF). (For representation only)

Uttar Pradesh excise minister Nitin Agarwal said, “Along with the breaking the hold of the liquor cartel, the state government has made the move to allot shops through e-lottery and open the door for new players.”

The dominance of the liquor syndicate in Uttar Pradesh is not new. In the 1990s, liquor players like Badri Prasad Jaiswal, Jawahar Lal Jaiswal, Tilak Raj Sharma and Har Prasad Jaiswal had a firm grip on the liquor trade in Uttar Pradesh.

With money power and political protection, the syndicate grabbed a majority of liquor shops in biddings.

In 2007, when the Bahujan Samaj Party (BSP) formed a government, liquor baron Gurdeep Singh Chadha alias Ponty Chadha monopolised the multi-crore liquor business in the state. Such was Chadha’s clout that 17 districts in West UP with 5,000 retail outlets were declared a special excise zone under his company’s control.

The BSP government had entrusted the responsibility of handling the liquor trade in the state to UP State Sugar factories Federation (UPSSFF). Yet, the syndicate controlled the liquor trade and the role of UPSSFF remained limited to a mere facilitator.

After incurring a massive revenue loss, the BSP government invited traders to participate in lottery for liquor outlets but the syndicate managed to maintain its stranglehold.

Distilleries were allegedly directed to supply liquor to the wholesalers run by the syndicate. The retailers were left with no option but to purchase various brands of liquor from the wholesalers on their terms. Popular foreign liquor brands vanished from the shelf and the brand finalised by the syndicate was sold in the market.

Despite the change of the guard in the 2012 assembly election with the formation of the Samajwadi Party, Chadha’s firm continued its monopoly over the liquor business in the state.

After the formation of the BJP government in 2017 , chief minister Yogi Adityanath brought the new excise policy in 2018 to break the monopoly of liquor barons. The special zone system was scrapped, liquor shops were auctioned online and a person was allowed to get a licence for only two shops in one district and the state government decided to link the bidding process with Aadhar and PAN to check the entry of the syndicate.