Retailers selling cigarettes and liquor in black hike prices

With liquor and cigarettes not classified as essentials in India, prices of these products have shot up with several retailers selling them at black charging 5-10% price premium over their sticker rate.

While grocery shops are the only ones selling cigarettes since pan-and-cigarette shops remaining closed for the 21 days lockdown, these retailers are selling packs at Rs 5-15 more than their printed price citing limited stock, a senior industry executive said.

In case of liquor, shops in certain parts are selling through backdoor at a premium only to selected customers since liquor shops are closed throughout the country with the exception of Kerala and intermittent openings at Delhi.

Production and supplies of both liquor and cigarettes have been suspended since the lockdown announcement, even though top manufacturers said there is plenty of stock lying in their warehouses.

In response to a questionnaire, an ITC spokesperson said the company would urge consumers not to pay more than the MRP printed on the retail packages.

Arun Kumar Parasa, president of Karnataka Brewers and Distillers Association, said the sale of liquor in black is nil to negligible in Bengaluru. “Retailers will not be able to sell liquor in black during this lockdown because of account books. If the lockdown is lifted in just about two weeks, they will need to show closing and opening figures of sale.”

Liqour industry organizations have approached the government to exempt the sector so that consumers can get the products with consumption having gone up with people stuck at home and production can be started.

Many top brewers and distillers in Karnataka have approached the state excise department seeking permits to allow operations of the continuous process industry, which includes the preliminary steps of making hard spirits and beer such as fermentation of barley and yeast to reduce wastage. Even wineries are approaching the government to permit transport of perishable raw ingredient in grapes to help farmers earn their livelihood.

Rahul Singh, founder at the Beer Cafe chain, said all other countries in lockdown have allowed on-premise retailers to deliver the current and leftover stock of beer off-premise. “It is most unfortunate that we are not allowed to home deliver our current stocks. Nearly Rs 3 crore worth of beer across my chain is lying unused. Delivering it will help increase liquidity for restaurants,” he said.

A distiller in Bengaluru, who requested anonymity, said he has informally asked the state government to explore the option of either keeping the liquor stores open or regulate sales like in Kerala where Indian Made Foreign Liquor (IMFL) is being sold based on doctor’s prescription during the lockdown. “Regulated sale and consumption of liquor will keep people’s pent up frustration in check and help ease out stress during these challenging times of lockdown,” he said.

United Breweries and Aneheuser Busch InBev, that together control three-fourth of India’s beer market, had told ET earlier this year that they don’t expect a revival in the industry in 2020-21and expect it to grow in low single digit dragged by increasing taxation and regulations amidst overall economic slowdown. Industry sources say that with Covid-19 outbreak and resulting lockdown, the sale of beer and hard spirits will further drop by 10-15%.

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