Alcohal at ₹99 ! Andhra CM C Naidu announce new liquor policy

Published On: October 1, 2024 5:29 pm

Discover Andhra Pradesh’s new liquor policy allowing 180 ml of any brand for ₹99, effective October 12, 2024. Learn about its impact on affordability, quality assurance, and public health initiatives under CM N. Chandrababu Naidu’s administration.

This comprehensive overview highlights the key aspects of Andhra Pradesh’s new liquor policy while addressing its implications for consumers and public health within a rapidly changing regulatory environment.

The Andhra Pradesh government, under Chief Minister N. Chandrababu Naidu, has announced a new liquor policy aimed at making alcohol more accessible and affordable to consumers. This policy, effective from October 12, 2024, allows for the sale of 180 ml of liquor from any brand at a price of ₹99. The initiative is part of a broader strategy to enhance the quality and availability of liquor while also addressing issues related to illicit alcohol sales and public health concerns.

Overview of the New Liquor Policy

Key Features

Affordable Pricing: Under the new policy, consumers can purchase 180 ml of liquor for ₹99, making it one of the most affordable options in India. This pricing strategy aims to curb the demand for illicit alcohol by providing a legitimate and cost-effective alternative.
Private Retail Participation: The government will privatize liquor sales by offering 3,736 retail licenses through an online lottery system. This move is expected to attract investments and increase competition among retailers.
Quality Assurance: The policy emphasizes the procurement of liquor from reputable brands, reversing the previous government’s focus on local brands that were often criticized for their quality. The new regulations will allow well-known manufacturers to supply their products in the state.
Health Initiatives: The government plans to allocate funds for de-addiction centers and counseling services as part of its commitment to public health. This is in response to rising health issues associated with poor-quality liquor consumption.
Licensing Structure: Licenses will be categorized into four slabs with fees ranging from ₹50 lakh to ₹85 lakh, depending on the type of outlet. Premium outlets will also be established with higher licensing fees and longer tenures.

New Policy affect the state’s Revenue from liquor sales

The new liquor policy introduced by the Andhra Pradesh government is expected to significantly impact the state’s revenue from liquor sales. Chief Minister N. Chandrababu Naidu’s administration has set ambitious revenue targets and outlined a comprehensive framework designed to revitalize the liquor market.

Expected Revenue Increase

Revenue Projections: The new policy aims to generate an estimated ₹5,500 crore in revenue over its two-year tenure, which runs from October 12, 2024, to September 30, 20262 3. This marks a substantial increase compared to previous years when revenue from liquor sales had declined due to restrictive policies.
Market Reopening: The policy is designed to reverse a five-year trend of declining sales, which had halved during the previous government’s tenure due to prohibitive measures and price hikes2 4. By privatizing retail sales and allowing private entities to operate 3,736 liquor shops across the state, the government expects renewed interest from consumers and suppliers alike.
Attracting Investments: The introduction of affordable liquor options priced at ₹99 aims to draw in consumers who previously turned to illicit alcohol due to high prices and limited availability of quality products1 2. This strategy not only seeks to boost legitimate sales but also encourages national suppliers to introduce their brands at competitive prices.

Structural Changes in Liquor Sales

Privatization of Retail: The new policy allows for private participation in liquor sales, which is a significant shift from the previous government’s approach that focused on state-run outlets3 4. This privatization is expected to foster competition among retailers, improve service quality, and enhance consumer choice.
Retailer Margins: Retailers will receive a margin of 20% on sales across various categories of alcoholic beverages, which incentivizes them to promote higher sales volumes3. This margin structure is likely to attract more retailers into the market, further boosting overall revenue.
Licensing and Fees: The government has established a structured licensing framework with fees ranging from ₹50 lakh to ₹85 lakh depending on the location and type of outlet2 4. This structured approach ensures that the state collects substantial upfront revenue while also maintaining a regulated market environment.

Background and Context

The introduction of this new policy comes after years of criticism directed at the previous administration led by Y.S. Jagan Mohan Reddy, which implemented a phased prohibition on alcohol sales that significantly reduced the number of retail outlets and limited consumer choices. This earlier policy led to increased sales of illicit alcohol and health problems among residents due to the consumption of low-quality products.

Economic Implications

The Andhra Pradesh government expects this new liquor policy to generate substantial revenue, with estimates suggesting an increase of ₹5,500 crore over the next two years. By revitalizing the liquor market, which had seen a decline in sales due to previous restrictions, the government aims to restore Andhra Pradesh’s position as one of India’s top markets for alcoholic beverages.

Public Health Concerns

Health officials have raised alarms about rising cases of liver and kidney diseases linked to poor-quality liquor consumption during the previous administration’s tenure. The new policy aims not only to improve product quality but also to address these health issues through increased funding for health initiatives related to alcohol consumption.

Conclusion

The new liquor policy in Andhra Pradesh represents a significant shift towards ensuring quality and affordability in alcoholic beverages while addressing public health concerns. By allowing private participation in retail sales and focusing on reputable brands, the government aims to create a more competitive market that benefits consumers and boosts state revenue.