Cheers Next Door: Why Liquor Lovers Head Across Border For Right Choice

Time of India

15-06-2025

New Delhi: Until a few years ago, 40-year-old Arun Bhatia, a marketing professional with a multinational FMCG company, always shopped for his preferred brands of liquor in Delhi.
The rates were relatively cheaper than in Noida, where he lives, and he trusted the quality more. He would spend considerable time at his favourite shop in Connaught Place, browsing through the various brands available there.
The trend changed completely in the last three years. Bhatia and several other liquor enthusiasts in Delhi now visit the ultra-modern liquor shops in neighbouring Gurgaon or Faridabad, where not only are the prices lower, but the variety of Indian and foreign brands in each category of liquor is also huge.
Customers visit the liquor showrooms in the neighbouring towns of Haryana and Uttar Pradesh for the sheer experience that is completely missing in the capital, where people are forced to jostle against each other in a small shop and ask for the bottle from across a huge desk or an iron grill.
What changed in the last few years was that the retail liquor business in the capital failed to keep pace with other states. Before Nov 2021, when Delhi govt rolled out a new excise policy, there were both state-run stores and private shops involved in the retail liquor business.
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While the four state corporations – Delhi Tourism and Transportation Development Corporation, Delhi State Industrial and Infrastructure Development Corporation, Delhi State Civil Supplies Corporation and Delhi Consumers' Cooperative Wholesale Store Limited – operated nearly 475 shops, there were 375 private liquor stores.
With the rollout of Delhi Excise Policy-2021, govt handed over the retail and wholesale liquor business to private entities.
The policy, however, soon ran into trouble and had to be withdrawn. As a knee-jerk reaction, the then state govt reintroduced the previous excise policy but handed over the retail business to the four govt corporations.
According to industry insiders, Delhi's existing retail model, which is a legacy of the past, has drawbacks that hurt consumers, businesses and the state treasury alike. "The govt-run retail structure reduces competition and limits brand availability.
This restricts consumer choice, as retailers promote select products instead of offering a diverse range," said an industry insider.
A senior Delhi govt official agreed that the four corporations almost "monopolised" the retail business and promoted select brands. The capping on retail margin at Rs 50 for India-made foreign liquor and Rs 100 for foreign liquor, which was discontinued during the nine months in 2022 and 2023 when the new excise policy was in force, returned with the rollback to the old excise regime.
"Instead of stocking premium brands that move slowly, the retailers thus keep cheaper brands in a price range of Rs 400–600, which sell faster," said the official.
Delhi govt, meanwhile, recently announced that it would soon roll out a new policy, making sale and distribution of liquor in the city transparent and accountable. A high-level committee had been formed under chief secretary for the purpose, it said.
An analysis done by the excise department showed that the top 10 brands of liquor sold in Delhi do not figure in the preference list of customers in other states.
Officials said the problem particularly existed in the lower category price segments, where the customer found it inconvenient in terms of both time and effort to hitch-hike to the neighbouring state and purchase his or her choice of brand. Allowing brand-pushing leads to overstocking of less popular brands, reducing the space available for brands that are genuinely popular.
"This also results in the consumer shifting to neighbouring states, leading to suboptimal sales and consequently, revenue loss to the govt.
The menace of brand-pushing not only disregards actual consumer preferences but also undermines fair market competition. It creates an opaque system where certain brands dominate not due to quality or popularity but because of alleged malpractices," said an official.
The four govt corporations even planned to introduce a standard operating procedure based on the weighted average of sales patterns of brands across the country, states constituting the national capital region, and within the capital to curb brand-pushing.
Industry experts, however, said the retail outlets, if privatised, would automatically stock brands as per consumers' preferences.
The industry also blamed the non-availability of well-known Indian brands at Delhi stores for customers going to Haryana and Uttar Pradesh. Anant Iyer, director general of the Confederation of Indian Alcoholic Beverage Companies, said Delhi's excise policy discriminated heavily between IMFL and foreign brands.
While all Indian whiskies have to pay a brand licence fee of Rs 25 lakh for each product, Rs 12 lakh per brand for rum, gin, and vodka, Rs 8 lakh for brandy, and Rs 15 lakh for beer, the licence fee for imported liquor is Rs 15 lakh for five brands of whisky, rum, gin, vodka, and brandy, and Rs 50,000 per additional brand.
The licence fee for imported wine and liqueur brands is Rs 7 lakh for 10 brands and Rs 50,000 per additional brand.
"Some of the prominent single malts are not available in Delhi because the companies decided not to sell here due to discriminatory licence fees. Let there be a level playing field and healthy competition," said Iyer.
Poor retail density is another reason why Delhi's revenue from liquor trade has not grown as much as in the neighbouring states of Haryana and Uttar Pradesh. According to industry experts, Delhi has about 762 liquor and wine shops, of which only 603 are operational.
This brings Delhi's retail density to 2.7 retail shops per lakh population, against the national average retail density of 5.2. In comparison, the retail density in UP is 4.1 and in Haryana 7.8.
Officials said nearly 30% of Delhi living in unauthorised colonies remained completely unserved, leading to smuggling of non-duty-paid liquor from the neighbouring states. Delhi prohibits the opening of liquor shops in non-conforming areas.
Officials estimate that the state is losing Rs 1,300–1,500 crore yearly due to the rule.
With Delhi govt likely to bring a new liquor policy, the industry players have several expectations. Officials agreed that serious changes were required in certain rules, which may not only create a level playing field for both Indian and foreign players but also prevent customers from going to Gurgaon or Noida to buy their stock.
"We are in the process of making certain changes in our policy," said an official. The excise policy in the capital is announced at the beginning of each financial year.
The excise department extended the policy of the 2024–25 financial year for three months this year, till June 30, 2025. Sources said the govt may announce a new policy soon.
Sanjit Padhi, chief executive officer of the International Spirits and Wines Association of India, said as the national capital, Delhi should be the leading city in providing the best retail infrastructure to both its residents and visitors. "We believe that with a progressive retail policy, the state can provide its consumers not only brand choice but also a retail infrastructure that would be comparable to its neighbouring states in terms of buying experience and choice of leading brands.
This would also lead to enhanced revenue, as consumers do not have to travel to neighbouring cities for their favourite brands," Padhi said.