The Uttar Pradesh (UP) government has introduced a new excise policy for 2025-26. The policy aims to reform liquor sales, tourism, and revenue generation. Approved on February 5, 2024, it introduces composite liquor shops and tourism incentives. The policy also revises licensing rules. While these changes simplify operations, they raise concerns for vendors. Is this a win for UP’s economy or a risky move?
Composite Liquor Shops: Simplification or Monopoly Risk?
One key change is the introduction of composite liquor shops. These shops will merge beer and foreign liquor sales under one license. The aim is to simplify operations and improve consumer convenience. However, country-made liquor will still be sold separately.
This move benefits businesses and consumers but raises concerns. Larger retail chains could dominate and push out small vendors. If demand surges and supply tightens, prices may rise. Smaller shop owners worry about being unable to compete. While streamlining is efficient, the policy must protect small businesses.
Consumers, on the other hand, may find this more convenient. Instead of visiting different stores, they can get all premium liquor under one roof. However, the separation of country-made liquor might still create a two-tier system. Some customers may still need to visit separate shops for cheaper alcohol.
A New Push for Vineyard Tourism and Craft Beer
UP wants to promote vineyards and microbreweries like Nashik, Maharashtra. Wineries are planned in Malihabad and Muzaffarnagar. Licensing fees are being reduced to attract new businesses.
The government hopes this will boost tourism and local farming. Farmers may benefit from higher fruit demand for wine production. However, climate conditions and public perception could impact success. The success of vineyards depends on consumer interest and government support.
Microbreweries are another major attraction. The demand for craft beer has grown across India. By encouraging small-scale breweries, UP aims to create unique attractions. This move could also create new jobs in the food and beverage industry. Tourism hotspots like Agra and Varanasi could benefit significantly.
Despite the promise, challenges exist. Setting up microbreweries requires significant investment. Additionally, excise duties could impact affordability. Will the government provide incentives for small brewers? If so, it could encourage more entrepreneurs to enter the market.
Revenue Generation vs. Vendor Concerns
The government targets ₹2.6 lakh crore in revenue, a ₹10,000 crore increase. Excise duties on country-made liquor and IMFL will rise. Officials argue this will boost state income.
Vendors worry price hikes will push consumers to unregulated markets. To support businesses, license fees for beer bars in key cities will drop. Whether this offsets higher costs remains uncertain. Higher prices could lead to smuggling and illicit liquor production.
Alcohol consumption patterns may shift due to price changes. If legal alcohol becomes too expensive, consumers might seek alternatives. The government must strike a balance between revenue and affordability. The industry’s response will be crucial in determining the policy’s success.
E-Lottery System: Fair Play or Business Disruption?
The government will allocate liquor shop licenses via an e-lottery system. No individual can own more than two liquor shops.
This ensures transparency but disrupts existing businesses. Vendors who invested in infrastructure now face uncertainty. Many have urged the government to reconsider. Some argue that experienced vendors should get priority.
New businesses may benefit from a more level playing field. However, older vendors claim it undermines their investments. A transition period may help reduce disruptions. The government could consider a hybrid model to balance fairness and stability.
Impact on Delhi’s Liquor Market
UP’s policy could impact liquor sales in Delhi. Delhi scrapped its 2022 excise policy, pushing buyers to Gurugram.
With UP offering more variety, consumers may shift to Noida and Ghaziabad. This could reshape regional liquor markets. Competition between states may lead to pricing adjustments.
Delhi residents often travel to neighboring states for better alcohol deals. If UP provides better options, Gurugram’s dominance could decline. Businesses in UP stand to gain from cross-border sales. However, Delhi’s excise policy might change in response.
Industry Reactions and Government’s Stand
Stakeholders welcome lower beer bar license fees but worry about the e-lottery. Ashok Yadav, a vendor, praised the merging of beer and foreign liquor licenses. “It’s a big relief,” he said.
Others fear displacement due to the lottery. UP Excise Commissioner Dr. Adarsh Singh defended the policy. “Challenges exist, but we aim for transparency,” he stated. He sees UP as a future tourism hub like Nashik.
Critics argue that sudden policy changes can harm existing businesses. The government needs to ensure smooth implementation. Policy revisions should address industry concerns while maintaining transparency.
A Step Forward or a Balancing Act?
UP’s excise policy aims to modernize the industry and increase revenue. Composite liquor shops, microbreweries, and transparency reforms show ambition.
However, small vendors fear losses. Illicit markets could grow if prices rise. The government must balance revenue goals with industry stability. The coming months will reveal if this policy is a success or a misstep. If implemented effectively, it could set a precedent for other states. However, if concerns are not addressed, it might face resistance.
The policy’s long-term impact will depend on enforcement and consumer response. If successful, it could redefine UP’s liquor industry and boost tourism. The state must monitor its effects and adjust accordingly. Ensuring fairness, stability, and economic growth should remain the key focus.