Can the New Delhi's excise policy cheer up all?

Retailers play a pivotal role in helping alcohol brands gain exposure and customers. Without a visible presence on store shelves, there are few other opportunities for customers to view products. Retailers can also host tasting events where people can sample alcoholic beverages, which is an effective retail marketing strategy.

Remember that beer, wine, and spirits enthusiasts tend to put a little more thought into their purchases. While they might not care which brand of milk they buy, they will spend some time exploring different IPAs or tequilas. The right retail marketing strategy and in-store displays can help capture these customers, increase sales and turn browsers into lifelong customers. That is why displays should be a priority and not an afterthought.

The New Delhi excise policy is a step in the right direction. It aims at revolutionising the consumer experience by replacing the existing liquor vends in the nooks and corners of the city, with swanky liquor stores spread over at least 500 square feet area with walk-in facility. The new excise policy allows opening of five super-premium retail vends having an area of 2,500 square feet. Liquor tasting facilities will also be developed at these super-premium retail vends.

Under the new excise policy, which was announced earlier this year, the legal age for liquor consumption was reduced to 21 years from 25. Under the new policy, the licence fee has now increased to Rs 6.5 crore to Rs 7 crore per shop. The last set of licenses was allotted in September, and all new licensees were asked to begin operations from November 17. The government earned Rs 8,900 crores through the bidding process. Notably, it was 26.7 per cent higher than the reserved price for the licenses.

The government's earnings from these vendors do not stop at the license. The government would earn approx Rs 650 crores from excise duty, import fees, VAT and other license fees. Apart from that, the government is expecting to earn another Rs 900 to Rs 1,000 crore from licensing of new brands, distributor licenses and more.

As per the government data, the Delhi government has been earning up to Rs5,500 crores per annum from the liquor sector.

The new excise policy pushed the revenue up by around 40 per cent. Interestingly, the retailers would be free to decide the selling price of the liquor, and the government would not have a say in the MRP.

The retail outlets can only operate between 10 AM to 10 PM. Airport outlets may function 24×7. The new policy could lead to higher prices for consumers, but better retails experience and can make informed choices. For the government it will mean more revenue. I guess its cheers all around.