Delhi May Face Shortage Of Premium Liquor Brands As Excise Policy Extended

As the festive season nears, residents of Delhi may experience delays in acquiring premium liquor due to the Delhi government's decision to extend its current excise policy by an additional six months. Officials announced on Thursday that the state government is yet to formulate a new liquor trade framework. With the approval of the AAP-led Delhi government and LG VK Saxena, the existing policy has been prolonged until March 31, 2024.

This extension followed the approval of the government and was subsequently submitted for LG's endorsement by the excise department. The existing excise policy was originally enacted on September 1, 2022.

Once the excise department releases the notification for the policy extension, existing excise licenses will be renewed for an additional six months, with fees payable on a pro-rata basis, as per officials.

The need to either extend the policy or introduce a new one arose as the current excise policy was scheduled to expire on September 30. This is crucial for fulfilling the regulatory requirements for operating liquor trade, both retail and wholesale, in Delhi. With the policy's extension, private entities will not have access to the liquor trade in the national capital, at least until April 2024. The expectation is that a new excise regime will be introduced by that time.

The current policy was initially intended as a temporary measure to prevent a regulatory void following the abrupt withdrawal of the new excise policy for 2021-22 by the Aam Aadmi Party (AAP) government, following LG VK Saxena's recommendation for a CBI inquiry into alleged irregularities in its implementation.

The new policy (2021-22) was implemented on November 17, 2021, and concluded on August 31, 2022. It was designed to reform the liquor trade in Delhi, with the state government relinquishing retail liquor sales and permitting private entities to operate liquor stores throughout the city under a more lenient excise system.

Professionals in the liquor trade emphasized the necessity for regulatory stability in Delhi to facilitate a smooth liquor business and enhance the consumer experience.

Vinod Giri, Director General of the Confederation of Indian Alcoholic Beverages Companies, expressed, "The existing policy is being repeatedly extended merely to sustain ongoing operations. It lacks a comprehensive excise policy design that would benefit all stakeholders. What the industry requires above all is regulatory consistency."

In the absence of a long-term excise policy, companies find it challenging to make extensive plans. Giri stressed the importance of policy clarity for the coming year or two, enabling investments and operations within the state.

He anticipates a formal excise policy announcement from the government in the next fiscal year, emphasizing the significance of not subjecting Delhi's important market to the uncertainties of short-term excise regulations.