These shops now wear a deserted look with poor demand.


Hyderabad: Long queues in front of liquor shops have disappeared within a week in Telangana and Andhra Pradesh, thanks to the tepid demand and shortage of supply. When liquor retails shops were opened from 7 May in both the Telugu speaking states, there were huge queue lines, some shops being so crowded that needed police force to regulate. Now, these shops wore a deserted look with poor demand. If the first day sales of liquor in Telangana on 7 May was Rs 75 crore, it came down to Rs 55 crore on 8 May, Rs 45 crore on 9 May, Rs 42 crore on 10 May and around Rs 30 core in the next five days. Same is the case with Andhra which opened its liquor shops on 6 May, netting around Rs 90 on the first day, followed by constant slide, touching Rs 40 crore by 15 May. Excise officials from both the states said that these figures are close to 40% down from those of the same period last year. Usually, summer is the season for higher sale of beers and all other types too rake in profits. Initial expectations that the wine shops closed since 22 March, Janata Curfew day would be a big hit after 42 days gap have gone wrong. The slump in liquor sales may go on for some more weeks.

Like most states in the country, Telangana and Andhra Pradesh, too, depend on the excise revenues for their day-to-day survival, right from paying salaries to government employees to meet administration costs. If Andhra Pradesh is estimated to make annual revenue of Rs 18,000 crore on liquor sales, Telangana mops around Rs 20,000 crore from the same, in normal times. These two states have been increasing sales and revenue targets by 15- 20% every year. The Y.S. Jagan Mohan Reddy government that came to power on the promise of implementing staggered total prohibition, has followed a method of curbing number shops and increasing the prices to meet its goal. The Jagan government has also taken over the retail liquor trade in Andhra Pradesh.

To cash in on the estimated demand for liquor after lockdown, both the governments have hiked the prices—Andhra Pradesh by 75% and Telangana by an average 16%. But, the sagging sales have belied their hopes. Andhra Pradesh wanted to net around Rs 3,000 crore by the end of May, while Telangana set a target of around Rs 2,500 crore, but the current indications point to decrease by 45% in sales. This is because of a variety of factors. First is the poor purchase power of middleclass which is the chief patron of costly liquor brands. This middle-class people have drastically reduced visiting liquor shops, according to Hyderabad wine and liquor retail shops association representative Sridhar Reddy. “We are visited mostly by the poor who buy cheap liquor brands,” he said. Government earns marginal profits on cheaper brands, while hefty gain comes from higher brands in the range of around Rs 2,000 plus per full bottle of 750 ml. The price hike on these costly brands is around 40 per cent in Telangana, which too must have caused slump in sales, said Reddy who owns a cluster of shops in the city.

Another reason is shortage of beers, preferred beverage during summer. Due to shutting down of beverage plants, the excise department is unable to supply enough beers to the shops, thus foregoing the niche demand. A major hurdle for restarting beverage is shortage of labour who mostly migrated to their native places. The beer production is unlikely to pick up before June. An important factor for falling liquor sales is public aversion to consume it at home. Thanks to the lockdown, all family members are at home and it is difficult for men (major consumer segment) consume the stuff at home, in the presence of kids etc.

“Earlier, they used to consume at bachelor rooms or common places, now they have gone,” said L. Venkateswara Rao, an excise inspector in Hyderabad.

Besides, in most families, women are calling the shots and they discourager men from wasting money on liquor.