Liquor lucre: Punjab hopes for bigger returns by going smaller

What’s brewing: Reserve price for bids to come down; target still nearly 12 bottles/person.
Chandigarh : The excise department of Punjab plans to lend a new lease of life to the state’s “stagnant” liquor trade by bringing in new and smaller players. And prices are set to come down too!
However, the sales targets for the “stagnant sector” for the coming financial year (2018-19) remain significant, at 33.6 crore bottles — 21.6 crore of Indian-made foreign liquor (IMFL), 7.2 crore of Punjab-made liquor (PML), and 4.8 crore of beer.
Taking the state’s population (2.8 crore) into account, for every resident, this means a quota (mandated sales target) of 12 bottles a year, or 9 litres, though this is 10% lower than the ongoing fiscal, which had already seen a 15% cut as compared to the fiscal before that.
“Because of stagnation, it has been proposed to reduce quota,” said a department official not authorised to speak to the media. Also, sellers will not be mandated to make 100% sales this time, and consumption of 80-90% would also be acceptable, which again means moderation of targets.
Yet, the department is set to fix an excise duty target of Rs 5,600 crore, which is Rs 300 crore more than the target for the current fiscal. In the 11 months till February, the collection from liquor was Rs 4,800 crore.
On the business front, as per the excise policy likely to declared on March 12, the size of cartels will be cut from a Rs 40-crore reserve price ones, to those with reserve price of Rs 5 crore. This, officials hope, will encourage bids by smaller players in the draw-of-lots system that would be followed this year too. Entry of smaller traders, say officials, will give the department better control, boost revenue, and check overpricing.