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In 2019, a survey by Local Circles found 68% of 12,000 respondents in Delhi rarely found their preferred brand in government liquor stores. Of this, 49% respondents ended up buying the alternative brand and 19% shopped from neighbouring states.
Current government regulation doesn’t help either. The rules of classifying liquor club 80% of Indian Made Foreign Liquor (IMFL) under one slab, and the process of registering foreign liquor is complex and four tier. In addition, the rules facilitate the registration of unlimited varieties cheap liquor with a minimum-sale criteria, meaning that shopkeepers and manufacturers have an incentive to push a particular brand to meet the threshold. There are at least 30 brands of just whisky alone that are sold only in Delhi, said a person with knowledge of developments.
This also leads to possible loss of revenue. For example, premium brands of whisky command a licence fee of ₹25 lakh in Delhi; if an off-the-books brand is sold instead, this revenue is foregone. Plus, per bottle, the government levies roughly 40%-50% excise duty. This means that if the price of a premium brand is ₹400, the government stands to lose about ₹160 to ₹200 per bottle if an off-the-books local brand is pushed by retailers.
The Delhi government earned ₹5,028.17 crore as excise duty in 2018-19, and officials believe the actual income should be much more. Officials also pointed out that globally known brands like McDowells, Royal Challenge or Royal Stag were suppressed at many government shops while some lesser-known brands were pushed.
Why does this happen, and where?
The excise department official, quoted above, said that instances of brand pushing and brand suppression are found in both government and private shops. “But the incentives are different,” he said. Delhi has 720 registered liquor stores, 460 of which are government run and the rest by private firms or individuals.
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