Benagluru: Sales of alcoholic beverages in Maharashtra could get a short-term boost because of the Supreme Court’s easing of regulations governing the state’s dance bars, industry experts and executives said.

The Maharashtra government has not granted licences for dance bars since 2005.

In 2015, the apex court lifted the ban and paved the way for these bars to secure licences with the caveat that the performances could not be obscene.

However, according to a batch of pleas by restaurant and hotel owners, a 2016 law in Maharashtra, in effect, banned any dance performance.

On Thursday, the Supreme Court upheld but diluted that law, the Maharashtra Prohibition of Obscene Dance in Hotels, Restaurants and Bar Rooms and Protection of Dignity of Women Act, 2016.

It did away with restrictions such as the requirement of a partition between the performance area and the bar, and a ban on serving alcohol on the dance stage.

“It is an additional sales channel that will open up so it will give an immediate boost. Dance bars were big in terms of beer consumption because prices for spirits were very high. However, if they are allowed and some get upgraded, even spirit consumption can go up," said Deepak Roy, executive vice chairman of Allied Blenders and Distillers Pvt. Ltd (ABD).

Alcohol sales across categories—from wine to beer and spirits—took a toll after the Supreme Court’s ban on liquor sales near highways during 2017. Maharashtra has since had to deal with two more blows. At the end of 2017, the Maharashtra government increased the excise duty on beer by a sharp 17%, denting sales in 2018. From 1 January 2019, it also hiked the excise duty on spirits by 20-25% for premium and mid-sized brands, and 5% for small brands.

“My sense is at dance bars it will be more of low and mid-end spirits. I don’t think it is too much of premium spirits, but it is definitely positive for the industry overall," said Abneesh Roy, senior vice president at Edelweiss Securities.

Dance bars used to contribute a huge chunk of volume sales during their heyday and the easing should lend a boost, especially to beer, said a Mumbai-based industry executive. Around 20% of Mumbai’s beer consumption came from dance bars when these establishments were at their peak, said the executive mentioned above on condition of anonymity. There were around 3,500 of them in the city alone, the executive said.

However, All India Brewers Association’s director general, Shobhan Roy, does not expect any significant shifts in beer consumption.

“Dance bars are only Mumbai-centric. Even there, they are mostly in the suburbs. It opens up one more channel of consumption, but it’s not a significant channel," Roy said.

“It is mostly the lower end and the mid-segment that will benefit but even they won’t benefit greatly. The clientele at dance bars used to go to have fun and also to drink but when dance bars were shut, they would’ve gone elsewhere," said Pramod Krishna, an independent alcobev industry consultant and former head of the Confederation of Indian Alcoholic Beverage Companies.

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