Delhi completes liquor licence allotment in all 32 zones; earns ₹8,900 crore

The Delhi government has completed the process of appointing new licensees for the retail sale of liquor in each of the newly carved 32 excise zones of the national Capital. Data accessed by HT showed that the state excise department earned at least Rs8,900 crore through the bidding process of these zones alone, which is about 26.7% higher than the reserve price set by the government.

Deputy chief minister Manish Sisodia, who is also Delhi’s excise minister, is likely to reveal these details in press conference scheduled at 2pm on Wednesday. All the new retail liquor licensees have been asked to begin operations from November 17 this year. This will also mark the departure of the Delhi government from the retail business of liquor in the city as the entire segment will be privatised as mandated under the latest Delhi Excise Policy, 2021.

Of the 32 zones, the draw for 20 zones was done on August 5 and 6. The remaining 12 were allotted this week. The excise department had kept a total reserve price for all the 32 zones at around Rs7,041 crore, whereas it actually managed to earn about Rs8,917.59 crore through bidding.

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Excise reports seen by HT showed that in terms of absolute amount, Zone 28 covering areas such as Dwarka-A, Deoli, Bhajanpura, Kardampuri and Quraish Nagar won the highest bid (Rs357 crore). But when analysed in terms of the highest profit earned by the government in terms of the base price, Zone 32, which is the Airport zone, topped the list as it went for Rs235 crore against the reserve price of Rs105 crore -- about 124% higher than the reserve price.

In addition to the bid value for the 32 zones, the excise department will also earn about Rs650 crore from excise duty, import fees, value added tax and other licence fees, an excise official said on condition of anonymity. Another Rs900 crore to Rs1,000 crore is expected to come from licensing of new brands, distributor licenses, etc.

This will mark a new record for the Capital, and push annual earnings growth rate from the current 5-7% to over 30% -- highlighting that the new excise policy, which aims to reform the city’s liquor business by improving user experience, cleaning up the liquor mafia and eradicating pilferage, is making an impact within two months of being adopted.

The average revenue of the city over the past three years stood at around Rs5,500 crore annually, according to government data. The new policy was implemented on June 11. Under the new policy, retailers are free to decide the selling prices in a competitive environment, rather than an MRP being mandated by the government. Each zone will have at least 27 liquor vends — all of which will go to one successful bidder.

The newly appointed retail licensees will have to build bigger and modern liquor vends from November 17. Customers will get the facility to walk in and choose their preferred liquor brands. Under the new policy, business hours have been fixed as from 10am to 10pm, while those at the airport may open round-the-clock.

The policy, among other things, envisages five new super-premium liquor shops for high-value products. It includes a rule that any liquor shop in the city should be at least 500 square feet in size. It gets rid of the iron grilles at the front of most liquor vends in the Capital, and allows buyers to browse and purchase the brands of their choice. For this, the shops have to be spacious, well lit and air-conditioned to allow customers a walk-in experience and must be under camera surveillance. Shop owners will have to ensure that liquor sale and pick-up takes place properly inside the shop premises. It also allows home delivery of liquor in the Capital through websites and apps.