Bidding of retail liquor vends in Delhi by Excise dept earns Rs 5,300 cr

The initial bidding of retail liquor vends in 20 zones across the national capital by the Delhi government's Excise department on Friday raked in Rs 5,300 crore, official sources said.

Of the 20 zones, each having 27 retail liquor vends, 12 zones or nearly 324 shops were shared by six private firms, they said.

The auction of 16 zones out of the 20 was done on Thursday and remaining four zones went in the block on Friday, officials said.

According to the tender process, each party was allowed to participate in bidding for two zones, they said.

"The tender process forbids a party from bidding in more than two zones, which will bring in more players into the market, thus preventing instances of monopoly," they claimed.

The new Excise Policy of the Delhi government divides the national capital into 32 zones. Of them, the auction of 12 zones was cancelled due to lack of adequate bidders and fresh tenders will be floated for them, officials said.

With bidding of liquor vends to private players, the Delhi government also moved out of the retail distribution of liquor which was one stated goal of its excise policy for 2021-22. So, far majority of the 849 liquor stores in the city were run by its three agencies.

The auction beat all estimates and targets. Under the previous excise policy regime, the yearly growth rates in revenue were limited to five to seven per cent, they said.

"Under the new policy, a growth of around 35 per cent is expected and is well on track to be achieved. A zone-wise revenue of around around Rs 8,800 crores is estimated once the entire bidding process is completed," officials claimed.

In the previous excise regime, a total of Rs 6,358 crores were collected in the fiscal year 2019-2020 after collection of excise from Indian and foreign liquor, VAT collected from wholesale and retail sales, HCR excise, and retail licensing fees, they said.

The biggest grossers for the government was zone 31 comprising New Delhi Municipal Council (NDMC) and Delhi Cantonment area, that earned the highest price of Rs 315 crore, against a reserve price of Rs 217 crore. Zone 32 or airport zone earned Rs 235 crore against a reserve price of Rs 105 crore.

Zone 19 comprising Daryaganj, Chhatarpur, CR Park, Sangam Vihar, Chandni Chowk and other areas went for Rs 313 crore against reserve bid price of Rs 225 crore.

The reserve bidding price was set at Rs 221 crores and the tenders were awarded at an average premium of 20 per cent with the average bid price being Rs 265 crores, officials said.

The tenders for 32 zones were floated by the Excise department in June. The successful bidders will be have L-7Z or L-7V licences for retail sale of Indian and foreign liquor.

Under the new policy in addition to the Rs 8,800 crores that is estimated to be earned from the auctions, the additional projected revenue after collecting Excise, VAT, Import Fees, CSDN, HCR Licenses, Wholesale Licenses, and HCR VAT will be approximately Rs 650 crores, taking the total projected revenue close to Rs 9,500 crores, stated the officials.

The policy aims at among other things to have liquor stores of international quality in the city providing a walk-in experience to the consumers and offer them a variety of brands.