In a first for its kind in India, the state of Haryana is set to allow large offices to serve beer, wine, and ready-to-drink low-content alcoholic beverages within their premises from next month. The move has been hailed as “transformational” by some insiders in the alcobev industry.
Haryana’s council of ministers has given the green light to the state’s liquor excise policy for 2023-24. Under this policy, corporate offices in Haryana with a minimum covered area of 100,000 square feet in a single premises and at least 5,000 employees will be allowed to possess and consume alcohol.
From June 12 onwards, the policy will not only permit corporate offices in Haryana to serve alcohol, but also lower excise duty on mild beer, wine, and draught beer. Additionally, it will reduce the annual fee for bar licenses in restaurants, pubs, and cafes.
According to executives in the alcobev industry, the state’s decision will redefine the drinking culture in Gurgaon, which is home to some of the largest corporate offices in India.
“We will be working with large corporates to set up infrastructure and operate these licences,” said Rahul Singh, Founder of beer and pub chain Beer Cafe.
According to him, having “clear-cut guidelines” regarding the size of the office and the minimum number of employees would prevent the license from being misused.
“The reduction in annual fee for bar licences in restaurants, pubs and cafes will help our industry to bounce back stronger from the unprecedented pandemic infused disruptions,” Singh added.
AB InBev India’s Vice President of Corporate Affairs, Anasuya Ray, who heads the Indian unit of the world’s largest brewer responsible for the production of Budweiser beer, welcomed the decision to impose lower taxes on low-alcohol beverages like beer, as compared to hard spirits.
Maximum impact in Gurgaon:
“The policy will also improve ease of doing business in the state and enable consumers to opt for premium brands with improved retail access,” she said.
Industry executives have stated that the growth of the alcobev category is hindered due to heavy restrictions and multiple levels of taxation imposed by different states.
Although the policy applies to the state of Haryana, executives have noted that its maximum impact would be felt in Gurgaon, which houses a large cluster of multinational and domestic companies across various sectors such as technology and IT services, automobiles, consumer goods, and consultancy firms.
A senior executive from a prominent technology company based in Gurgaon mentioned that the new policy would particularly benefit offices where employees work in shifts and late hours. However, he preferred to remain anonymous as he is not authorized to speak on behalf of the company.
According to Ashish Kapur, the Founder of upscale bar chains Whisky Samba and Wine Company, the newly introduced excise policy in Haryana will boost the demand for the entire category of alcoholic beverages in the state.
“Reduction in excise on low-alcohol drinks and ready-to-drink beverages will fuel demand from young consumers and encourage so many newer entrepreneurial brands, as well as categories such as premium wines,” he said. “Also, lowering excise fee for bars will encourage people to drink in organised premises and hence will promote responsible drinking.”
Industry executives have appealed to other states to adopt the Haryana policy to encourage the consumption of alcoholic beverages in general.
“States have typically increased excise on liquor; that’s killing the ecosystem. What needs to be done is lower the excise duties and promote responsible drinking,” Kapur said.
The policy incorporates significant provisions for small-scale breweries, and mandates that caution signboards must be displayed in hotels, pubs, and restaurants serving alcoholic beverages.
Nita Kapoor, Chief Executive of International Spirits and Wines Association of India (ISWAI), said the policy needs to also include digitisation. “Digitisation is a key industry ask, especially with respect to label and pricing approvals. Currently, these are done manually and are time-consuming, leading to operational delays,” she said.
As per the policy, a canteen or eatery seeking a license must have a minimum area of 2,000 square feet, and the license will be granted upon payment of a fixed annual fee of INR 10 lakh.
