The Andhra Pradesh government has introduced a new liquor policy, set to take effect on October 12, 2024, marking a significant shift toward privatized alcohol retail. This policy, modeled after successful practices in other states like Haryana, aims to generate around ₹5,500 crore in revenue for the state.
The policy will allow private retailers to sell alcohol through 3,736 shops across Andhra Pradesh, ending state control over liquor sales. The overhaul comes as part of a broader effort to revive the state’s liquor market, which has seen a significant decline over the past five years due to consistent price hikes and the promotion of local suppliers.
One of the key features of the new policy is the introduction of low-cost liquor priced at ₹99 or less. This move is intended to provide affordable alcohol options for lower-income groups while also reducing the demand for illicit alcohol. National suppliers will be encouraged to launch their brands at these price points, potentially revitalizing the market.
The policy is expected to bring Andhra Pradesh back into the top three liquor markets in India, with companies and analysts predicting a reversal of the sales decline. The excise policy will be in place for two years, ensuring stability and predictability for retailers, which is likely to attract more participants.
In a bid to further stimulate growth, licences will be allocated via an online lottery system, with four licence categories ranging from ₹50 lakh to ₹85 lakh in fees. Retailers will be allowed to make a 20% profit on sales. Additionally, the state will issue 12 premium licences with a five-year tenure at a fee of ₹1 crore each.
The policy could lead to substantial gains for larger industry players. With the potential for new investments, particularly in the beer industry, the state’s liquor market could see a revival worth thousands of crores. Each brewery investment in Andhra Pradesh is estimated to cost between ₹300 crore and ₹500 crore, according to industry experts.
The new liquor policy represents a bold step towards privatization and modernization of Andhra Pradesh’s excise framework, with the promise of economic growth and a better-regulated alcohol market.
