Giving License To Online Delivery Apps Like Swiggy, Zomato, And Big Basket To Doorstep Delivery Of Alcohol Brings More Revenue And Increases Overall Consumption

Online delivery platforms like Zomato, Swiggy, and Big Basket might commence delivery for less alcoholic drinks such as beer, wine, and liqueurs in several states like New Delhi, Haryana, Karnataka, Punjab, Tamil Nadu, Kerala, and Goa, according to a report by the Economic Times.  

The above states are observing a ‘pilot project’ for this initiative and are currently, considering the pros and cons of delivering fewer alcoholic drinks at home.

The state authorities are actively seeking feedback from e-commerce platforms and manufacturers to come to a decision.

What is a Pilot Project?

A pilot project is a small-scale preliminary test or experiment which enables an organization to try or check new products or services in terms of feasibility, cost, and outcomes to determine the effectiveness in the market.

It also enables an organization to refine the product or service, and identify any issues or challenges before proceeding with the complete implementation.

Swiggy and Zomato previous initiatives

In 2020, when Covid-19 pandemic hit the country, Swiggy and Zomato expanded their services by providing home delivery for alcoholic drinks in non-metropolitan areas due to heavy losses in their businesses.

Swiggy first began its alcohol delivery service in Ranchi, after receiving approvals from the Jharkhand government.

Adding to the list, Zomato also followed suit, and launched its online delivery services for alcohol in Ranchi with plans to expand the services in seven other cities of Jharkhand.

Both the companies at that time were having talks with authorities to expand their services in other cities, although approvals were taking time from a few weeks to a month. Swiggy wanted to expand its business in Odisha, but couldn’t receive approval due to the impact of Cyclone Amphan in the region.  

However, states like Maharashtra, Jharkhand, Chhattisgarh and Assam were given temporary approval for liquor deliveries with few restrictions.

As of now, online delivery of alcohol is only permitted in Odisha and West Bengal, resulting in an increase of sales by 20-30 %, according to industry retail executives.

Benefits of online alcohol delivery

Swiggy’s Vice President of Corporate Affairs, Dinker Vashisht mentioned the benefits of online delivery of liquor, as reported by the Economic Times. He said, “online models ensure end-to-end transaction records, age verification and adhere to limits.”

“Further, online tech stacks synchronize with regulatory and excise requirements, ensuring adherence to timings, dry days, and zonal delivery guardrails,” he added.

Rahul Singh, CEO of the Beer Cafe, mentioned that enabling online liquor home deliveries can enhance consumer convenience, economic growth while keeping in mind responsible and regulated distribution of alcohol.

An industry executive highlighted the fact that online delivery is driven by the evolving needs and preferences of consumers.  He also mentioned that women and senior citizens find it uncomfortable to purchase liquor from the shops, which might make their shopping experience convenient and comfortable, as stated in the Economic Times report.

But the question here arises, is it a boon or bane for the society?

While the convenience of online alcohol delivery may attract some consumers, there have been some risks associated with the same.

1.     Erosion of social fabric

Alcohol consumption is considered as a culturally defined activity, which is mainly affected by social mobility and economic status. The easy availability of alcohol through online delivery might contribute to erosion of social fabric and organization of the Indian society since conservative and traditional communities are not in favor of frequent and heavy drinking practices.

2.     Health issues

Alcohol has an intoxicating chemical which leads to frequent and heavy drinking resulting in various health issues like liver diseases (Steatosis, fibrosis and cirrhosis etc.), GI inflammation and bleeding, heart diseases, mental health issues and many more.

Globally, 3 million deaths are recorded every year due to consumption of alcohol, the World Health Organization reported.

3.     Increase in domestic violence

Domestic violence is a significant issue that affects millions of women globally. According to a Family Health Survey conducted in 2015-2016, 33% of married women had become the victims of domestic violence after their husbands consumed alcohol.

The availability of alcohol through online delivery could result in increasing cases of domestic violence and public nuisance which will impact the well-being of a family.

4.     Challenges in implementing ‘Responsible consumption’

‘Responsible consumption’ will remain a crucial challenge when it comes to online alcohol delivery, even after considering practices like age verification and limits while purchasing.

For instance, a consumer may use multiple IDs or accounts for ordering, or lie about their age during the verification process.

Despite the above mentioned risks, the government might allow online delivery of alcohol to bring more revenue resulting in overall consumption.

As more consumers consume alcohol due to instant delivery, it will generate a lot of revenue for the government. Nearly 15 to 20 percent of the revenue comes from liquor, according to a report.

UP collected around Rs. 41,250 crore from excise duty during the financial year 2022-2023 whereas, India earned around 1.75 lakh crore from excise duty in the 2020-2021.

Moreover, the government has earned crores from the sale of liquor in major states like Karnataka, Maharashtra, Delhi, Punjab and Madhya Pradesh during the year 2020-2021.

Hence, the government will be able to generate more tax revenue as these online platforms offer transparent transactions and digital receipts etc.