No More Discount on MRP of Liquor by Delhi Government
The Delhi Government passed an order on the 28th of February 2022, for discontinuing discounts, concessions, and rebates on the Maximum retail price that are being offered by the liquor vendors. And, if they fail in following the aforementioned order, strict actions will be taken against them. This was issued by the Department of Excise and was for all the licensees. This order came amidst the offering of a huge discount of up to 30-40% by the liquor vendors to finish their liquor stocks by the end of March.
Because of this, there have been massive crowds in front of liquor outlets causing jams.The Government had passed an excise policy last year that allowed the liquor vendors to offer heavy discounts on the liquor to attract customers. The order was passed to promote healthy market competition. But, another order has been passed this year which stops the heavy discounts because the discounts and rebates being offered were leading to unhealthy market competition and were carried out to meet short-term monetary gains.
There was also disruption of peace and sanity because of the large crowds that were gathering to avail of these discounts. The excise department also noted the problems regarding law and order which have been caused by the gathering of massive crowds. Moreover, we are still in between a pandemic and such gatherings are like to increase the chances of people getting affected by Covid and are on the way to another lockdown in Delhi.
It was also laid down in the order passed by the excise department that the offer to give discounts to the customers was a choice given to the vendors and offering such discount schemes was not a part of the government’s long-term plan. The vendors are trying to empty their stocks by the end of March as it is then when the licenses will be renewed.
Moreover, some vendors also indulged in putting hoardings and banners of hefty discounts and putting up posts on their social media accounts to attract customers which were not allowed by the government. This has also caused a lot of trouble and inconvenience to the local population that has been residing in those areas. The L7Z licensees have been ordered to abide by Rule 54(3) of the Delhi Excise Rules, 2010.
Even after the order has been issued, if any such notice is brought before the government that the vendors are offering discounts or concessions then strict actions will be taken according to tot the Rules of the Act and along with this, they will also be liable for penal actions to be taken against them.
The actions will be taken following the tender documents which shall be initiated against such defaulters. The older excise policy which allowed the discounts was passed by the Government of Delhi in November 2021 which had allowed the vendors to adopt a better competitive policy in terms of pricing. This was not allowed under the excise policy that was being followed before 2021. Under the policy of 2021, the Government had set up a maximum price ceiling for the liquor brands, and the vendors were supposed to not cross that ceiling.
The vendors can sell the liquor at any price below these ceiling limits but not above them. The government was trying to make it a playing level field or perfect competition for the vendors to sell their products and because of this many times the prices of liquor had fallen below the MRP. The Aam Aadmi Party-led government had passed this order in 2021 and it was implemented in November after which more than 580 liquor shops were opened by private firms in Delhi and more than 849 licenses were allotted by the AAP led government for the retail sale of liquor to private parties through various tender processes.
After this, The municipal corporations led by the Bharatiya Janata Party had sealed a lot of liquor shops in the previous year as they were violating the Delhi Master Plan provisions. If the Liquor shops were falling in the non-confirming areas then the excise department has allowed the licensees to shift their shops in commercial areas that were authorized by the government within a given zone. The city was further divided into a total of 32 zones and licenses were issued according to this.
As per the new excise policy, private players owned the liquor business in Delhi wherein the whole city was divided into 32 zones and the players were allowed to open 849 spacious shops of an area of at least 500 sq meters. Up until 28th January, a total of 552 shops were opened out of the allowed number in these 32 zones.
On 1st February’22, it was informed by the Delhi HC that the excise policy that was passed in the year 2021 is to be continued beyond the month of March’22 and that there will not be any new changes in the policy in the upcoming financial year. However, the same was not followed. As per the policy of 2021, the discounts offered on certain IMFL brands had scored up to 35% in various liquor shops in the area of Mayur Vihar, Shahdara, and Jahangirpur in New Delhi.
However, apart from these heavy discounts, the long queues were also an outcome of the social distancing norms being followed in various stores therefore distance between customers maintained, another reason being wedding season as well as holidays and weekends also added to the crowding in the liquor stores. Due to the rate cuts, large quantities were bought by the people in Delhi as well as in neighboring cities.
As per the order, one retail licensee is allowed 27 maximum liquor shops in a particular zone out of the 32 zones that have been allowed. 5 super premium retail shops of 2,500 sq feet were allowed to be open. L-17 licensees allowed the gastro-bars or the restaurants to serve Indian or as Foreign alcohol in lower areas of the restaurants, balconies, and terrace but the serving areas should not be in the view of the public. New Liquor stores are now supposed to be equipped with air conditioners along with CCTV cameras. The new order passed by the Government will put a hold on the heavy sale of alcohol.
