
Govt may amend rules to auction excise licences, wine merchants up in arms
Excise minister RB Timmapur said preparations are under way for the auction and that it is likely be completed in Sept. But industry stakeholders are sceptical. They say the number of licences that can be auctioned is significantly lower than the number listed by the department.
The Federation of Wine Merchants' Associations of Karnataka says licences that the excise department considers unrenewed for about 30-35 years, and those that are pending approval, have been listed for auction.
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The federation said the list has a total 241 licences, including 136 under the CL-2 category (retail liquor shops) and 105 under CL-9 (bars).
However, 463 unrenewed licences were reportedly allotted to Mysore Sales International Ltd (MSIL) in 2009 and hence cannot be auctioned now.
Additionally, the federation contented that a total of 260 CL-2 and 216 CL-9 licences were validated following the allocation to MSIL till March 31.
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It maintained that only 42 licences of the 241 listed licences are pending renewal as 199 were from before 2008-09 when unrenewed licences were given to MSIL.
Office-bearers of the federation met chief minister Siddaramaiah during his visit to Delhi last week and submitted an appeal against the department's decision to auction licences.
Timmapur has said that he has asked officials to consider legal issues raised by the federation.
"The rules may have to be amended to auction licences," he said, adding that merchants may be worried about the effect of new licence approvals on their businesses.
A senior official told TOI that details of the auctioning process are yet to be decided. "The available licences will be auctioned only after legal hurdles are cleared," the official said, adding that the merchants' interpretation is inaccurate.
The decision to auction licences comes in the backdrop of low liquor sales in the state compared to last year.
The excise department said sales of beer fell by 20.4% between April 1 and July 30 this year, compared to the same period last year. Sales of Indian-made liquor (IML) also fell, but at 2% the decrease wasn't as dramatic. Interestingly, revenue for the period rose by 12.2% in 2025 compared to 2024.
The department had increased additional excise duty on IML in May and excise duty on beer in Jan. Excise duty on beer now stands at 200% from the earlier 195%. However, the other component of paying Rs 130 per bulk litre (whichever is higher) was dropped.
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