New excise policy spells end of IFL monopoly

Under the Haryana government’s new liquor licensing policy, the excise department will issue licences to multiple vendors, with regards to Imported Foreign Liquor

Under the Haryana government’s new liquor licensing policy, the excise department will issue licences to multiple vendors, with regards to Imported Foreign Liquor (IFL), to prevent monopoly in wholesale. In a complete turnaround from the policy of 2018, which had laid down that only the highest bidder would get the licence, the department will now issue licences to up to 15 vendors, at a fixed fee of ₹1 crore.

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The Haryana Cabinet on Thursday approved the new excise policy, in which they have given relief to wholesalers and hoteliers who will have a choice to buy from any licensed wholesaler, for 2020-2021.

HC Dahiya, deputy excise and taxation commissioner (west), said that applications for the licence (L-1BF) should be made online and it will be issued through e-tendering. “As many as 15 people can apply for the same. The bar and restaurants will be benefitted, as due to the competition, they will get discounts from the wholesalers and they can pick their merchandise from any of them,” he said.

Aruna Singh, deputy excise and taxation commissioner (east), said that the move will end the monopoly and the imported liquor will be cheaper from April 1. “The excise policy of 2018 had given licence to the highest bidder to supply IFL in the state. This led to a monopoly. The move was opposed by retailers, restaurateurs and bar owners on the grounds that with just one wholesaler in the whole state, a monopolistic economy had been created, resulting in a hike of IFL prices and non-availability of certain brands,” she said.

In 2018, the excise department had issued only one licence for IFL. In 2019, the department had floated a tender for four licences but received only two applications.

The International Spirits and Wines Association of India (ISWAI), a representative body promoted by multinational alcoholic beverage companies, had filed a petition in Supreme Court in 2019 alleging that both the licences were issued to the same party.

“We had gone to the Supreme Court against the formation of a private monopoly for the distribution of imported products in Haryana. The SC agreed with our position and asked the government to correct the situation. The government gracefully agreed to implement the court’s verdict immediately. However, no other party (besides the existing one came forward) and hence, the existing monopoly continued. This year, the Haryana government decided to encourage free-market forces and make the change to the excise policy for 2020-21, providing a satisfactory closure to this issue,” said Amrit Kiran Singh, executive chairman, ISWAI.

Members of National Restaurants Association of India (NRAI) said that Haryana’s excise policy has successfully achieved and strengthened the long-term objectives of breaking the cartels, broad basing trade by facilitating the entry of newer players of even modest means, establishing a transparent system of allotment of retail outlets, complete check on manufacturing and sale of spurious liquor, thwarting all attempts of evasion of excise levies and plugging leaks.

“Breaking of the monopolistic L-1BF wholesale licence and making it open will gain wider participation from new investors in the state. Use of e-invoice and generating passes online will curb illicit supply,” said Rahul Singh, trustee, NRAI.

NRAI members in January had met Dushyant Chautala, the deputy chief minister, who also holds the portfolios of excise and taxation, apprising him of the concern.

Also, to safeguard the interest of consumers and provide a level playing field, the maximum sale prices will be fixed by the department and displayed on its website. Restaurants, hotels and clubs buying from the licensed vendors will have to obtain a new L-2BF licence and pay fees for procuring supplies.

Excise adhesive labels shall also be required to be affixed on each bottle to ensure authenticity and tracking of the bottle. L-1BF licensee shall keep sufficient stock of all such brands as are registered and demanded by the buyers, to ensure assortment for the consumer at large.