How UP's liquor lottery system helped Yogi govt double revenue to Rs 50,000 crore in six years
Luck favored Akhand Pratap Dubey from Madhya Pradesh when he won ownership of a country liquor shop in Uttar Pradesh's Jhansi district through an online lottery held after seven years. Dubey beat 284 others for a small shop on the state border, a reflection of the high demand generated by Uttar Pradesh's revamped excise policy. The new policy and the lottery system helped the state double its liquor revenue to Rs 51,000 crore in 2024-25, compared to Rs 23,927 crore in 2018-19 before the pandemic.
Lottery drives high demand for liquor shops
The government held an online lottery in March-April 2024 for 27,308 liquor shops across four categories: country liquor, composite liquor (selling both beer and Indian Made Foreign Liquor or IMFL), cannabis outlets, and model shops with seating arrangements. The lottery attracted 4,18,111 applications, with about 15 applicants per shop on average. The excise department collected Rs 2,000 crore from processing fees alone. The fees ranged from Rs 25,000 for cannabis shops to Rs 60,000 for model shops.
Composite shops become most popular
Composite liquor shops proved to be the most sought-after category. One outlet in Greater Noida received 265 applications. Excise commissioner Adarsh Singh said, 'It did bring down the number of standalone IMFL and beer shops, but also increased the density of outlets that serve both segments — the clientele for beer and that of IMFL.' The government shut 5,970 standalone beer shops and 6,563 IMFL shops, replacing them with 9,362 composite shops.
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excise minister Nitin Agarwal stated, 'An estimated 40% of these shops are owned by new entrants, while the remaining have been in this business from earlier.' He added, 'UP is at the top spot in the country when it comes to revenue collection through excise duty. The retail liquor business in UP has become extremely lucrative, and that is why we have witnessed increased participation in the lottery this time.' About 5.6% of applicants came from other states.
Prohibition in Bihar benefits UP liquor sales
The ban on alcohol in Bihar has also helped increase sales in UP border districts such as Kushinagar, Deoria, and Ghazipur. Sunil Singh, who runs a composite liquor shop in Kushinagar, said, 'Though overall business prospects of the composite shop and the sales they could generate would be known only after some time, the response so far has exceeded my expectations.' Estimates show that demand for country liquor and IMFL has nearly tripled in UP districts bordering Bihar since the prohibition began.
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Structural changes encourage new brands
Manish Agarwal, managing director of Bareilly-based Superior Industries and a member of the All India Distillers' Association, said, 'The structural change in the way retail business is carried out in the state will help reach out to a larger number of patrons. The growing demand is encouraging stakeholders to come up with new brands.'
(The article originally published in TOI)
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