Liquor sales in Andhra Pradesh under the newly implemented liquor policy began on Wednesday, but the launch has sparked concerns among retailers due to reduced profit margins. Traders have raised complaints that their margins have fallen below 10%, in stark contrast to the promised 20% margin under Government Order (GO) 213. The situation has been further exacerbated by additional taxes imposed by the state, including a retail excise tax and a 2% drug control/rehabilitation cess, which have cut into the traders’ profits.
The AP Wine Dealers’ Association, led by President Rayala Subba Rao, is urging the state government to address these issues and reinstate the promised margin. “We urge the state government to ensure a 20% trade margin on issue price, as was initially promised. Maybe, there was some clerical error,” said Rao, highlighting that the current margin is unsustainable for businesses, especially in urban areas and municipalities, with Tadikonda Assembly segment in Guntur district being an exception.
Wednesday marked the first day of liquor sales for the new 2024-26 license period. Following a lottery-based selection process on October 14, provisional licenses were issued to traders who quickly set up shops and began receiving stock from liquor depots. While some traders have managed to secure new locations, others are temporarily operating from their previous locations until they can comply with all regulatory requirements. Permanent licenses will be issued once the traders secure suitable premises that meet government standards.
However, both traders and consumers faced difficulties on the first day. Many customers, unaware of the changes, returned to their regular shops only to find them closed or relocated due to the new policy. In some areas, consumers were also disappointed by the unavailability of 180ml bottles priced at ₹299 as promised by Chief Minister N. Chandrababu Naidu, finding that they continued to be sold at the old price of ₹120.
The government has allocated 3,396 retail outlets across the state, with an overwhelming response of 89,882 applications received for licenses. The licensing fees have generated a significant revenue of ₹1,798 crore for the 2024-26 period, a testament to the high demand for liquor trade licenses in the state.
To streamline the process, excise authorities are currently generating IDs for new license holders, enabling them to place orders online and collect stocks from designated depots. In a bid to refresh the market, authorities have also lifted old stocks from government-run outlets and started distributing fresh stocks to new retailers, with popular brands like McDowell’s and Blender’s Pride already making an appearance in some shops.
While the policy shift aims to regulate the liquor trade, traders are concerned that the lack of clarity on profit margins and increased tax burden could impact the sustainability of their businesses. As the state transitions into this new system, both the government and traders are hopeful that the initial challenges will be addressed, paving the way for smoother operations in the coming months.
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