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Andhra notifies new liquor policy, to allow private retailers
In the government order, principal secretary (excise) Mukesh Kumar Meena said the new policy will come into effect from October 12
The Andhra Pradesh government on Tuesday issued orders notifying the new liquor policy, withdrawing the retail liquor business from the government and entrusting it to private dealers in a move that is expected to bring ₹5,500 crore as revenue to the state.
In the government order, principal secretary (excise) Mukesh Kumar Meena said the new policy will come into effect from October 12 and till then, the government would continue to run the retail liquor business.
“The policy will have a tenure of two years, promoting stability and predictability in the regulatory environment, which is likely to encourage greater participation from retailers,” Meena said in the order.
The previous YSR Congress Party (YSRCP) government, led by YS Jagan Mohan Reddy, had taken over the retail liquor sale from the private dealers and operated the business through AP State Beverages Corporation. This policy came to an end on September 30.
Under the new policy, the state government has fixed the total number of shops for the licensing period 2024-26 at 3,736, of which 3,396 shops will be in the open category, while 340 shops have been reserved for the toddy tapper community.
“A separate notification and guidelines will be issued for disposal of the 340 shops earmarked for the toddy tapper community and premium stores,” Meena said.
Starting Tuesday, the government invited applications from private parties for operating 3,736 retail wine shops by paying a non-refundable application fee of ₹2 lakh each.
The selection of dealers will be done at the district level through a draw of an online lottery, if there are more applications for one retail shop, on October 11. The selected dealers would be given licences on payment of retail excise tax ranging from ₹50 lakh to ₹85 lakh, depending on the area and the population therein. The tax could be paid in 12 instalments during the two-year licence period.
The shop owners would get a profit of 20% on their sales and the government would grant licences to 12 premium shops with a tenure of five years with licence fees of ₹1 crore.
“The government is expected to generate revenue of ₹5,500 crore per annum through retail excise tax, besides other taxes,” an excise department official familiar with the development said.
The government order also announced introduction of a new category of low-priced liquor, costing ₹99 or less, to provide affordable options while maintaining quality standards and curb demand for illicit liquor.
“National suppliers shall be encouraged to introduce reputed national brands at this rate,” the order said.
The government has also decided to allow private retail wine shop dealers to upgrade their outlets into model shops across the state on payment of an additional retail excise tax of ₹5 lakh in addition to the annual tax they would pay. “Model stores will be permitted to stock and sell all liquor related accessories like ice buckets, ice tongs, wine corks screws, trays, glasses, goblets in the licensed premises,” Meena said.
In a white paper on liquor policy implemented by the previous Jagan Mohan-led government, CM Chandrababu Naidu said the previous government had increased the prices of liquor abnormally on the pretext that it would discourage people from consuming liquor and ultimately lead to improvement in their quality of life.
“On the contrary, there was an increase in consumption of liquor. The per capita consumption, which was 5.55 litres in 2019-20, went up to 6.23 litres in 2023-24. It also led to illicit liquor distillation and inflow of non-duty paid liquor. Due to abnormally high liquor prices in the state, there was large scale smuggling of liquor from the neighbouring states of Telangana and Karnataka,” he said.
Even though prices of liquor were very high between 2019-24, consumption went up. However, there was no corresponding increase in revenue for the state government. “In fact, the government recorded a loss of revenue from liquor to the extent of ₹18,860.51 crore in the last five years,” Naidu said.
The chief minister pointed out that though the government was doing the retail liquor business, it had discouraged digital payments at the liquor outlets and forced consumers to do cash transactions to benefit the ruling party leaders. “Only in the last quarter of 2023-24, the government allowed digital payments,” he said.
