Andhra may review renewal of liquor shop licences

In a break from the past, the Andhra Pradesh government has through a recent order indicated that it may review the renewal of liquor shop licences in the state.

The previous state governments had renewed the licences of these shops on a yearly basis with minor modification in the licence fees.

This is for the first time that a government in the state has indicated that it may have a fresh look at the existing liquor licences without attributing any motive to the move. The move has raised worries among both liquor manufacturers and retailers.

The state government in its recent order (GO MS No 991) has made an amendment to sub-rule 1 of rule 26-A of the AP (Indian liquor and foreign liquor) rules, 1970 with the following substitute: "It shall not be mandatory for the government to renew the licence year after year. The licensee will not have any right for renewal at the end of the licence period, when the same expires. Subject to the policy of the government in this matter, which may be announced from time to time, the government may or may not renew the licence."

The order has surprised the liquor manufacturers and left them wondering as to what is in store for them from the next financial year on the excise front. A section of the liquor manufacturers view the government's move as a prelude to take over the retail trade as was done in Tamil Nadu in the past.

"This according to us may only favour only a Bangalore-based major liquor player who is trying to dictate terms across the industry," a top official of a leading liquor company told Business Standard.

Wholesale liquor trade has already been taken over by the state under the TDP regime led by N Chandrababu Naidu. According to another version, which is doing rounds in the ruling party circles, the government's move is directed at replacing existing shops, predominantly owned by the Telugu Desam party men, with those loyal to Congress.

It may be recalled here that the TDP was in power for a good seven years after Naidu lifted the liquor ban imposed by his late father-in-law and former chief minister N T Ramarao in 1995.

A dramatic jump in liquor sales was witnessed especially after the removal of prohibition in the state with licensed retail outlets increasing to about 6,500 vends from around 4,000 shops that existed before the imposition of the liquor ban.

At present, liquor business in the state has an annual turnover of about Rs 2,400 crore. In an average, about 1.8 million cases of liquor and 1.5 million cases of beer is sold each month in the state.