Beer prices in Gurugram to rise by up to 44%

With supply on credit drying up, retailers who have paid big money for licences, do not have the size of cash flows needed to buy beer in cash and stock their vends, resulting in the shortage.

Beer has become more expensive at the vends of Gurugram, and will cost more at restaurants and pubs as well from the start of July, because of factors ranging from a supply shortage to the higher reserve price set by the Haryana government in this year’s auction of licences to run liquor stores.

Prices of liquor and beer will mark sharp rise in Gurugram as compared to Delhi. (Parveen Kumar/Hindustan Times)

The price increase, ranging from 27% to 44%, is also linked to brewers stopping credit to vendors in the millennium city. A 330 ml bottle of Fosters beer costs ₹130 at a vend, up from ₹90. It is sold for ₹55 in the capital.

With supply on credit drying up, retailers who have paid big money for licences, do not have the size of cash flows needed to buy beer in cash and stock their vends, resulting in the shortage. HT could not independently ascertain the size of the shortage.

“We have suffered losses in the last three months due to a shortage of beer in the city; we have paid hefty licence fees and we are not making profits due to the short supply,” said Sanjeev Mehta of Lake Forest Wine, one of the retailers in the city.

In Haryana, MRP in beer, wines and spirits stands for minimum retail price, not maximum. This allows wholesalers and retailers freedom to price the products as they deem fit and the consumer cannot challenge the price he is charged.

“We do not regulate the end price to the users,” said Sanjeev Kaushal, additional chief secretary (excise and taxation).

The department increased the reserve price to ₹62.5 crore this year from ₹50 crore in 2017 at the auction of licences to liquor vends. Excise officials said 246 Indian Made Foreign Liquor liquor/country liquor vends were auctioned in March, and the government earned ₹741.29 crore.

Some Gurugram residents said they would rather go to Delhi to drink beer because the brew is fairly priced in the capital — at maximum retail price. Unlike in Gurgaon, the price is listed on the excise department’s website, and overcharging is not possible.

“My office is in Delhi and I buy all my beer from a government retail vend,” said Vinod Tayal a resident of DLF Phase 2.

“I can also check the authenticity of every purchase by going on the Delhi excise webpage or mobile app by scanning the QR Code. I just have to bring a case home, chill and drink. After all, ₹55 per pint when compared to ₹130 in this city is big savings for the same beer.”

Haryana’s excise policy this year did not increase the licence fee for restaurants and in fact reduced the value added tax on mild beer from 14% to 13.5%, said Rahul Singh, CEO of The Beer Cafe chain and president, National Restaurant Association of India. The relief was shortlived. “Domestic liquor supplies to restaurants come from the nearest retail vends, where they have arbitrarily increased the price of popular mild beer by 45%. This inflation can’t be absorbed and will naturally increase menu price for the consumers across all restaurants,” Singh said.