Despite the increasing excise revenue year after year, the wining and dining scene in Uttar Pradesh appears to be on the decline. Over the past three years, the number of restaurants, bars, hotels, and clubs that serve alcohol has been consistently decreasing, which is contrary to the widespread belief.
During the fiscal year 2021-22, Uttar Pradesh had a total of 734 establishments serving alcohol. However, in the next fiscal year (2022-23), this number decreased to 711. Interestingly, in the current fiscal year, only 638 licenses have been granted to hotels, restaurants, and clubs that offer alcoholic beverages.
The excise department has reached out to stakeholders for their input, as rising operational and rental costs are not the only concerns. Obtaining a fire safety NOC has become a major hurdle, particularly after the tragic fire incident at a Lucknow hotel on September 5th of last year, which claimed four lives.
According to industry insiders, the cost of obtaining a license to set up a bar in Uttar Pradesh is significantly higher than in other states.
Starting from this fiscal year, the excise department has introduced a special category for issuing bar licenses. Under this category, a minimum license fee of INR 15 lakh is required for bars located within a 5-km radius of the municipal corporations governing Lucknow, Ghaziabad, Noida, and Greater Noida (governed by industrial authorities). Prior to the 2022-23 fiscal year, the fee for such establishments was INR 10 lakh.
As the department prioritized generating higher revenues, bar owners began to withdraw from the industry.
Owner of a microbrewery-cum-bar located in the Summit building of Gomtinagar, Lucknow, Himanshu Dhanuk said, “I am facing a double whammy of sorts. License fee has gone up substantially and so has the duty on brew produced in the microbreweries. Four bars have already shut down in the Summit building in the past few months and it is becoming financially unviable to continue business.”