Liquor Prices in Delhi: What the Wholesale Price Rise Means for Consumers

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An increase in liquor prices in the city of about 8-9 percent is expected since the new excise directive the government of Delhi is to be implemented. This means that if a brand of liquor wholesale costs 400 rupees, its cost is now 432 rupees.

The revision is the result of changes caused by the new policy that almost all excise and sales taxes owed to the government are covered by the license fee at the time of licensing. In the past, liquor sellers had to pay these to the government for every unit sold. The government also said the previous structure generated corruption as there was an incentive to hide the actual amount of alcohol sold.

According to the order issued by the Excise Agency on Thursday, the wholesale price for Blenders Pride Rare Premium Whiskey is currently 266 rupees. The new price will be 291 rupees after the change.

According to the regulation, the impact on the consumer is taken into account before retail prices are set so that people have less incentive to buy spirits from NCR cities located in Uttar Pradesh and Haryana.

“It is important that the consumer is not burdened with price increases. The changes in the new excise policy will take a reasonable amount of time to penetrate the market. In the overall interest of Delhi consumers to prevent smuggling between states, the MRP for 2021-22 should be in the same range as Delhi as possible. This can be achieved by keeping the current amount of excise duties, VAT and retail margin at roughly the same level as in 2021-22 according to the rates for 2020-21. At the same time, the effects of an increase in the WSP (if any) in accordance with the parameters approved for the year 2021-22 must also be taken into account when determining the MRP, ”the order says.

The Excise Board has ordered that the ex-distillery (which sells liquor to wholesalers) in Delhi will be the lowest in India so the impact of the wholesale price increase will be minimal.

In the regulation, the government cites the final retail price as an example, which could look like after the changes are implemented. If a brand’s old MSRP was 470 rupees, it will now be around 490, department calculations show. This corresponds to an effective increase of around 4.25%.

What does the new alcohol policy look like?

Under the new directive, the government will exit the liquor business entirely and only private suppliers will be allowed. This change will take effect on November 17th when the new private outlets start operating.

Currently, all private outlets in the city are closed prior to the introduction of the new regime. Only around 450 state sales outlets are open. This is only a temporary agreement and once the private outlets are operational, all government outlets will be closed.

It also means that there is currently a shortage of alcohol in liquor sales. The shortage started in September when private sellers stopped buying stocks because they would be closed for a long time and the license tendering process was still ongoing. After that they close on October 1st.

There have traditionally been fewer brands and types of liquor in government outlets, and the impact is evident.


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