Loss to exchequer and liquor manufacturers

New Delhi: As many as 45 bar licences to hotels, restaurants and clubs in Patna will now be cancelled. According to sources in Bihar Excise Department, for four or five-star hotels, the ban means a revenue loss of up to Rs25 million each annually. The state government is likely to formulate a policy for disposal of 36,000 litres of Indian Made Foreign Liquor (IMFL) available with Bihar State Beverage Corporation Limited.

Besides, Bihar has four major players in liquor trade, including McDowell’s, United Breweries Limited (now Diego), Carlsberg and Cobra beer promoted by global giant Molson Coors and Lord Karan Bilimoria. The beer manufacturing unit of Molson-Billimoria at Bihta had tripled its packaging capacity and doubled its brewing capacity in 2011 onwards to tap the high demand of beer in the state due to liberal excise policy.

The ban means that no new IMFL factory will come up in Bihar but the existing one will face no problem. However, they will not supply in the state. This is a big blow for the beer firms as figures say the yearly off take of beer by liquor vends across the state until March, 2016 was around 2.5 billion cases while the yearly off take of whisky was around 500,000 cases.

Experts believe the ban would cost the Bihar state government a whopping Rs 4 billion in revenue annually. Bihar earned Rs 3.3 billion from liquor sales last year. Liquor sales had paid rich dividends as the state’s revenue figure rose from paltry Rs319 million in 2005-06 to Rs3.650 billion in 2014-15.

Jharkhand Excise Department was already laughing all the way to the bank even before the ban was imposed. In March, the Department earned Rs180 million more in revenue, an increase of 45 per cent, from the increased number of applicants for liquor shop licences. Deputy Commissioner of Excise Department Gajendra Kumar Singh said many applicants were from the areas bordering Bihar.