More than 75 permit rooms and 30 beer shops have shut shop in the city in the last financial year owing to poor sales and rising costs. The sobering statistic came to light when licence owners did not approach the excise department to renew their licence by March 31, the last date for renewal.
The Indian Hotel and Restaurant Association (AHAR) states that liquor sellers are going out of business at an alarming rate, as a multitude of issues plagued them and undercut their livelihood. Sudhakhar Shetty, president of AHAR, said, “Many licence holders have decided to shut shop because their profit margin has taken a huge dip. Sales too have gone down. Police harassment in the last one year has also been a decisive factor. The figure would have been much higher, but thankfully the licence fee was not raised this year.”
According to excise department figures, suburbs were more affected than the island city. About 50 permit rooms (FL-III) shut down in the suburbs, whereas 25 in the city did not renew their licence.
More to follow
Shetty further stated that lack of sops in the annual budget was a catalyst for owners to shut shop. “We had expectations from the ministry, considering the huge dip in liquor sales. We hoped that the government would have abolished or rather decreased the taxes and liquor prices. However, nothing was announced in our favour. This closing down trend is just the beginning. Many more shops will close down in the coming months,” said Shetty.
Santosh Talpade, a beer shop owner who decided to shut shop, said, “My profit margin went down by 51 per cent. The sops that were offered by the distillers too came down drastically. On weekends, I used to sell 600 beer bottles but since the prices were raised, the sale went down by 50 per cent.”
“Police harassment is one of the major reasons why most orchestra bars have decided to shut shop. The whole mess started after cops from the social service branch conducted several raids across the city and booked a number of bar owners under PITA. If this is what we have to keep on facing, why should we remain open? After paying a huge sum for the licence fee, we are forced to remain shut. It is better we do not renew our licence,” said a bar owner who claimed he shut down his bar due to police harassment, on the condition of anonymity.
According to figures released by the state’s excise department, the sale of Indian Made Foreign Liquor (IMFL) in the suburbs declined by 6.56 per cent in 2011-2012, while beer sales dipped by 7.66 per cent. Crushed by the heavy burden of taxes, tipplers sought solace in wine. The sale of which soared by 140.33 per cent, compared to figures received in the last financial year. In the island city, the sale percentage of IMFL dipped to negative figures in comparison to 2010-11 sales, calculated at -8.56 per cent. Beer sales followed suit at 7.98 per cent. Here too, the sale of wine and country liquor cruised, increasing by 14 and 0.39 per cent respectively.