Liquor Industry, Restaurants Pitch Several Models For Alcohol Home Delivery
A customer gets into a car outside a roadside liquor store located along a highway in Gurgaon, Haryana, India. (Photographer: Udit Kulshrestha/Bloomberg)

Liquor Industry, Restaurants Pitch Several Models For Alcohol Home Delivery

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The liquor industry, along with restaurants, bars and online food aggregators, has urged the government to permit home delivery of alcohol, saying this will not only ensure social distancing but also be a lifesaver for sectors ravaged by Covid-19 crisis.

The All India Brewers' Association has suggested creating a "special license for private e-commerce companies (such as Flipkart, Amazon, Grofers and others) and food delivery companies (such as Zomato, Swiggy and others) to take orders and fulfil demand from the existing licensed retailers and wholesalers in states".

It also mooted setting up an online liquor ordering platform, to be owned by the state excise departments.

Restaurants and hotels, which are sitting on a liquor stockpile worth around Rs 3,000 crore, are asking state governments to allow them to sell the stock lying with them due to the coronavirus lockdown.

"We request every state government to allow us an opportunity to sell our liquor stocks, preferably through a home delivery model,” Anurag Katriar, president of National Restaurant Association of India, said.

"This will help us deplete our stocks, raise some money to take care of urgent people needs and will still be compliant to social distancing norms. We understand that this may require some amendments to the law but I am sure it can be carried out under the current extraordinary circumstances.”

Online food ordering platforms are ready to start such services if permitted by the government. According to industry sources, discussions are underway between various authorities and e-commerce players for online sales and home delivery of liquor.

"Governments should consider institutionalising home delivery as a separate channel administered online. We will give all necessary assistance and cooperate fully in this," said Vinod Giri, director general of Confederation of Indian Alcoholic Beverage Companies.

"Currently, most exise-related processes—such as approval, licensing, registration, permits, EVCs, etc.—are physical in nature, needing human interaction. With today's technology, a lot of these can be easily made online thus cutting down human-to-human interface. Besides reducing virus transmission risks, it is also a good step forward against possible corruption," he added.

Several states allowed reopening of liquor shops after lockdown restrictions were eased on May 4. However, many places saw heavy rush and flouting of social distancing norms, forcing authorities to shut outlets.

A few states even imposed additional taxes of up to 75 percent to control demand as well as shore up their depleted revenues.

"Some states including Andhra Pradesh, Haryana and West Bengal have already reported a price hike. We also feel that if the price increase isn't well thought through, the government may lose out on a significant chuck of revenue due to prohibitive pricing," Radico Khaitan's Chief Operating Officer Amar Sinha said.

"As a company, we are not averse to the idea of price hike, but a calculated increase factoring in the purchasing power of the consumer is the way to go about it. It should ensure that the consumer can afford or buys his preferred brand instead of switching to a cheaper or spurious brand.

"At this point, liquor companies are also facing cost inflation and it is time that the government also considers re-looking at manufacturers viability and consumer affordability alongside the price hike," said Sinha.

The Beer Cafe founder and CEO Rahul Singh said that liquor sales in India take place through three licenced verticals—retail, horeca (hotels, restaurants and catering)—and canteen stores department.

The total horeca-licensed places are around 30,000 in the country and "at any given time, the stock in hand would be for one month. Which means that due to lockdown, the total unsold inventory lying at various horeca outlets across India would be around Rs 3,000 crore," he added.

According to associations, the liquor industry contributes Rs 2.5 lakh crore revenue to the state governments. States have lost revenue of around Rs 25,000 crore in the 40-odd days when liquor trade was closed.

The Supreme Court had on May 8 asked states to consider non-direct contact or online sales and home delivery of liquor during the lockdown period to prevent the spread of coronavirus on account of crowding at shops.

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