BackLiquor company shares fall after SC ruling, United Spirits down 5.76%
Among liquor companies, United Spirits fell 5.76%, Empee Distilleries 1.34%, Radico Khaitan 3.09%
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Mumbai: Shares of liquor stocks were trading lower on Monday after the Supreme Court said there will be no sale of liquor in hotels and restaurants or outlets within 500 metres of state and national highways.
United Spirits Ltd fell 5.76%, Globus Spirits 2.75%, Empee Distilleries 1.34%, GM Breweries 1.21%, Radico Khaitan 3.09%, and Pincon Spirit 2.83%.
Analysts expect that the judgment is likely to have a negative impact on volumes of breweries and distilleries companies as 35-40% of liquor outlets are located along highways.
“We expect the impact to be material but transitory in nature as destocking in first quarter of financial year 2018 due to relocation of these shops will be followed by restocking in 2Q/3QFY18 once shops are relocated," said Kotak Institutional Equities in a 31 March report.
A bench comprising Chief Justice J.S. Khehar and justices D.Y. Chandrachud and L. Nageswara Rao also modified an earlier ruling that banned sale of liquor within 500 metres of state and national highways. The court said the ban will be within 220 metres of the highways in towns with population below 20,000, Mint reported.
“We also note several states have already resorted to innovative ways (through either declaring state highways as urban roads or issuing in-shop licences) to circumvent this ban," the Kotak report added
The Rajasthan government has declared state highways passing through habituated areas as urban or district roads, which do not come under the purview of this ban.
The Chandigarh government has also declared all city roads as urban roads. The West Bengal government has issued in-shop licences to all existing liquor shops situated within 500 metres of highways an in-shop outlets (bars/restaurants) allow consumption of liquor on its premises.
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