Highway liquor ban: Time for restaurant owners to find a new business

SC banned liquor shops within 500 metres of a highway

At the age of 45, Subhash Gupta feels too old to start over, but this is what he would have to do, as the footfall of his four bar and restaurants steadily going down, post the Supreme Court ban on sale of liquor at establishments which falls within 500 meters range of State and National Highways.

Gupta, whose restaurants are spread across highways in Uttar Pradesh has shut two of his establishments and is on the verge of closing down the third one in Meerut. "It feels like an April fool's day joke gone haywire. Just 'food' does not sell, it has to be coupled with liquor. The footfall was down to 12 per cent in two of the restaurants before I shut them. Now I am trying to get a license to run a commercial establishment. I will try and turn them into shops and just run one of the restaurants," he said.

Still paying off debts of the last two restaurants he opened, Gupta is in a race against time to cut his losses.

In the last 20 odd days, the restaurant owners across the country have been struck by a series of events and policies that have turned the sector upside down. Already dealing with the tangle of licenses, rules and regulations, things such as the Supreme Court liquor ban around highways, talks of portion control and removal of service charges have all shook the industry to the core.

Many are looking for an exit from the sector altogether, others are looking for new spots, and thinking of adapting to the changes happening in the sector. "We do not see a way forward. A lot of hotels and restaurants are shutting down or are on the verge of doing so. Stand-alone restaurants who run their establishments from rented properties might just cut their lease short, of course at the cost of their security deposit. Many have asked us how they can convert their properties into commercial spaces," said Garish Oberoi, vice-president, Federation of Hotel & Restaurant Associations of India (FHRAI).

Recently, union minister Ram Vilas Paswan said that restaurants cannot ask their customers to pay a service charge, a decision which the industry finds harsh with long-standing consequences.

"For some reason, the government is a bit harsh on the restaurant industry. They may feel that restaurants are not a necessity and unlike developed nations, a service charge is an important part of our industry. This goes directly to all members of restaurants. Tips are not only restricted to waiters," said Rohit Malhotra, marketing head Barcelos a restaurant chain.

The chain has been affected by the liquor ban and is closing down one of its restaurants. It has also decided to move outlets from high street to malls which are going to cause a revenue loss. They are not the only ones not looking for highway properties anymore.

According to restaurant owners, the next phase of their expansion would happen away from the highway as bar and liquor constitute for sometimes almost 65 per cent of the revenue. "We have to abide by all the rules laid by the government. All we can do is ensuring that the expansion of the chain happens away from the highway," said Saurabh Khanijo, Managing Director- Kylin.