The Andhra Pradesh government has introduced a new liquor policy, allowing private retailers to sell alcohol, following the model of states like Haryana. This move is expected to generate Rs 5,500 crore in revenue for the state.
As part of a major overhaul, the government has decided to privatize the retail liquor market, notifying 3,736 shops across the state. The new policy will come into effect on October 12, 2024. The goal of the policy is to provide more affordable options to low-income groups while reducing the demand for illegal alcohol. A new price point has been set, with liquor available for Rs 99 or less, encouraging national suppliers to introduce products at this rate.
The state expects the new policy to reverse the decline in liquor sales seen over the past five years, positioning Andhra Pradesh as one of the top three markets in the country. The policy will be in place for two years, aiming to create a stable regulatory environment that could attract more retailers to participate.
Over the past five years, Andhra Pradesh's liquor market has reduced by half due to continuous price hikes that favored local businesses. The Indian beer industry anticipates renewed interest in investing in the state, with each brewery costing between Rs 300 crore and Rs 500 crore.
The allocation of retail licenses will be managed through an online lottery, with four categories of licenses available, carrying fees between Rs 50 lakh and Rs 85 lakh. Retailers are expected to earn a 20% profit on their sales, and the government will offer licenses for 12 premium stores for five years, with fees set at Rs 1 crore per license.
The policy is also expected to benefit larger companies, potentially increasing their market share in the state.
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