Shocked by the decision of the Supreme Court of the ban on liquor vends within 500 meters of national and state highways from April 1, the hospitality industry estimates that it could hit a loss of tens of crores of rupees in the business and approx 1 million could be affected by the order. The Supreme Court also cleared on Friday that its December 15 order on banning liquor vends across the highways is also applicable on the hotels and restaurants.
Here’s a lowdown on the impact of the Supreme Court’s order to ban on industry and how the states are dealing with it:
Kerala is looking out for some options, including in search of 3-month exception
The liquor business of Kerala is one of the major revenue shares for the state, which is definitely going to be affected badly in the state after the Supreme Court’s (SC) decision. Kerala is looking for the options like de-notification of state highways to district highways to get around the Supreme Court order. They are also approaching the apex court for a three-month exemption.
The annual revenue of the state is approx Rs 40,000 of which Rs 10,000 comes from the liquor trade only. It also has one of the highest per capita consumption of the liquor across the country, 10.2 litres yearly alongside the national average of 5.6 litres. Adding to this, one thing is pretty sure that the state’s tourism industry is also going to be affected badly by the liquor ban. According to the Tourism insiders (Reported by Hindustan Times), the industry is already rolling under the effect of demonetization, the increase of service tax from 4.5% to 9%, and towering premium for tourist vehicles.
The president of the Confederation of Kerala Tourism Industry EM Najeed said, “We are fast losing out to some of the neighboring countries like Sri Lanka. Last year, the state lost many conferences and meetings due to liquor curbs. We fear the latest decision will lead to further slip in footfall.” The Kerala State Beverages Corporation, the government-run retail giant, is facing rigid resistance in closely populated areas, whereas relocating 159 closed outlets, adding worries for the state government. As the Supreme Court order comes into action on April 1, 159 government-owned outlets, 1,557 beer and wine outlets, 1,008 toddy shops, 18 clubs and 11 bars in five-star hotels have been downed board up, according to Hindustan Times report. Adding to it, the Kerala Tourism Development Corporation has also been affected badly as 29 of the 40 beer shops have been closed down. It’s 40% of the revenue comes from these shops. The state PWD and excise minister G Sudhakaran said, “Densely-populated state’s situation is different from others. We have sought a legal opinion that whether the state will get a three-month exemption. We haven’t thought of a shortcut to duck the apex court order.”
There’s also another worry for the state excise department that unavailability of quality liquor may entertain regular drinkers to hooch and narcotic substances.
Rs 3 crore loss in the first weekend claims Chandigarh hoteliers
The Hotel and Restaurant Association of Chandigarh claimed that the hospitality industry is going to be affected badly in the state. The president of the association Arvinder Pal Singh said, “This weekend, the hospitality industry in Chandigarh will have incurred a loss of more than Rs 3 crore. We will protest at the Sector 17 Plaza on Monday.” He also added that the association has planned to request the UT administration to declare the stretch between sectors 35-43, national highways 5 part of the route towards Ludhiana as a ‘major district road’.
“We will meet the deputy commissioner, the UT adviser and, if required, we will approach the UT administrator as well and hand over a memorandum,” he said. “The order has hit nearly 150 restaurants, bars and other commercial establishments in the Tricity. In Chandigarh, there are 88 such establishments, of which 63 are bars and 25 are beer bars.” Singh added.
500 Mumbai Restaurants and Bars remained closed on Sunday
There were approx 500 restaurants and bars serving liquor within 500m of Mumbai’s highways remained closed on Sunday (HT Reported). Adding to it, there were many regular visitors to the wine shops, restaurants and bars, along with eastern express, western express and national highways passing through outer edge and Thane alleged they were stunned to see that these joints refused to serve liquor. The state excise department left no stone in implementing the order of the Supreme Court. They came into action on Saturday and sealed the godowns where the liquor was stored. They also gave an option to Hotels that if they want to operate, then only serve food and liquor will not be permitted. Some hoteliers agreed to do this and many preferred to shut their shops.
The president of Indian Hotels and Restaurant Association (AHAR) said, “Around 500 hotels in the suburbs fall within this restricted zone. They have all shut. The hoteliers have invested a lot in their business and are facing hard times.” Sourabh Kulkarni, 33, went to Oberoi Mall on Sunday and was shocked to see at the entrance that liquor would not be served. “No other restaurant nearby was willing to serve alcohol” (Hindustan Times reported). Vilas Rao, an executive with a multinational company also said that he was stunned to see that all the liquor shops near the Eastern Express highway in Chembur were closed. This order of the Supreme Court will hit 15,699 establishments and it will cost Maharashtra government Rs 7,000 every year.
Uttar Pradesh Government turns highways into district roads to avoid Supreme Court’s order
The government of Uttar Pradesh has taken the inspiration from the Chandigarh model to circumvent the Supreme Court’s order. They have simply rebranded many of its major highways as district roads. The additional chief secretary of Uttar Pradesh public works department Sadakant said on Saturday, “The internal roads of the city (currently notified as state highways) connected to a bypass are being declared as additional district roads while city bypasses are being declared as state highways.” The government finished renaming the roads just before a few hours before the apex court’s order on banning liquor vends on highways at March 31 midnight.
The UP government makes Rs 6,000 crore from the proceeds of 8,000-odd outlets (including the bars on the highways). Around 203 outlets in Lucknow, 100 in Kanpur and 221 in Varanasi faced immediate closure after the court order. The notification is bound to legalize many liquor vends, but it will take a time to conduct a new survey of the ones it can’t protect and the government is in no mood of taking a risk. A senior state excise department official told Hindustan Times that they will fully comply with the orders of the apex court. Many shops in the state capital fell under the Supreme Court’s order field due to ill-considered decisions made by the public works department, said The Lucknow Sharab Association (LSA). The LSA leader Kanhailal Maurya said, “Several areas were included under state and national highways hurriedly. This is why shops from Tile Wali Masjid to Koneshwar crossing, Thakurganj, Balaganj, and Dubagga have been forced to shut down. And we weren’t told about this until we paid our license fees!”
The liquor licenses that are given away on every March have always been a major source of income for the government. The LSA president SP Singh has already approached the high court, pleading that some shops have been wrongly shown to be part of the state highways (Reported HT).
Rajasthan also rebranded roads like UP and Chandigarh
The government of Rajasthan has declared that the state highways passing through habituated areas as district or urban roads to avoid the order of the Supreme Court. Like many of the states, excise duty is one of the biggest sources of revenue in Rajasthan too. In 2015-16, the state earned Rs 6,700 crore from excise duty and it has already fixed the target of Rs 7,300 for 2016-17. To avoid the lost through the order of SC, the state’s Public Works Department (PWD) issued an order for de-notification of 190km of 21 state highways passing through the 16 districts and measuring 3,029 km as urban roads or other district roads.
3,000 liquor licenses not renewed in Goa, CM Parrikar assures of some solution
The excise department of Goa on Saturday rejected to renew the licenses of the over 3,000 liquor vends. However, Chief Minister Manohar Parrikar assured that efforts would be made to get some solution and not affect the livelihood of the affected liquor traders. According to Hindustan Times, the meeting was held chaired by CM Parikkar and attended by Chief Secretary Dharmendra Sharma and top excise and finance department officials. From relocating liquor businesses to the proximity of national highways to the interior areas, all of it was discussed in the meeting.
The sources said, “It is one of the alternatives. After discussions, a proper policy will be worked out for relocating affected businesses.” It is also said that the existing excise laws allow bar and liquor store owners to shift their stock to new places. Goa is unarguably one of the most loved tourist destinations in India, where alcohol is taxed quite less than the other states. There are more than 11,000 licensed liquor vendors in the state (including bars and restaurant license holders) and more than 3,000 outlets that are facing problems due to the apex court order.