Liquor stocks rose nearly a per cent in Tuesday’s trading session after Maharashtra government is set to end a nearly five-decade-old ban on granting new liquor shop licences, a restriction in place since 1974.
According to a report in Loksatta, the state plans to issue 328 new wine shop licences as part of a major shift in its excise policy, intended to boost state revenue.
United Breweries shares surged over 1.23 per cent to ₹1,980.20 apiece. Som Distelleries share price gained as much as 0.70 per cent to ₹153.92 apiece on July 15. Meanwhile, other liquor stocks Sula Vineyards, G M Breweries also surged 0.67 per cent and 0.42 per cent.
“Liquor stocks are in focus for some sessions as the Maharashtra (the third-largest liquor-consuming state in India) will issue 328 new liquor licenses, ending a 50-year ban on granting new wine shop permits. This is likely to improve the distribution network for liquor companies,” said Siddhartha Khemka, Head of Research — Wealth Management at Motilal Oswal.
New liquor policy
The move comes after suggestions from a newly established committee and is considered a crucial element of Maharashtra’s wider plan to enhance revenue through its Excise Department, which already brings in approximately ₹43,000 crore annually, ranking it as the state’s fourth-largest income source.
Under the revamped policy, licences will be offered on a lease basis rather than being sold permanently. Currently, purchasing an old licence in Maharashtra can cost as much as ₹10 crore in the open market. However, the new licences will require a non-refundable deposit of ₹1 crore, and the government expects to collect around ₹35 crore annually in fees, according to The Indian Express report.
This policy aims to encourage greater participation in the liquor retail sector and improve accessibility, although concerns remain regarding who will ultimately benefit from the changes.
Although Maharashtra has a large and expanding population, the number of licensed liquor outlets has stayed fixed at 1,713 since the 1970s. In contrast, other Indian states have been steadily increasing their number of licences by around 3 per cent annually. Maharashtra, however, falls behind with just 1.5 liquor shops per one lakh people, significantly lower than the national average of six.
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