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NEW DELHI : Following the Delhi government’s move to implement a new excise policy, liquor companies are witnessing muted sales even during the peak season due to supply chain issues and a few operational stores.

As liquor businesses transition to the new regime introduced by the Aam Aadmi Party government earlier this year, many distributors are yet to get a licence while retail shops await inspections by the excise authorities to open stores.

A majority of the estimated 900 stores in Delhi are still not operational due to the delays. “It’s bad because we have not been able to supply liquor in Delhi, as our registration (from the excise department) has not come through," said Anand Virmani, co-founder and CEO, Nao Spirits and Beverages that manufactures gin brands such as Greater Than and Hapusa.

“Still many liquor stores are being refurbished. Everyone knows that it’s going to take a little bit of time for brands to get registered and be able to supply." According to Virmani the entire process could take a week to 10 days.

Diageo India declined to comment for the story.

Several other manufacturers Mint spoke to said they were awaiting clearance from the excise authorities after the new policy came into effect.

Under the new guidelines, liquor outlets can be opened only after physical inspection and the verification process is causing delays, said Vinod Giri, director general of industry body, the Confederation of Indian Alcoholic Beverage Companies (CIABC).

In terms of quantity and quantity, Delhi is a significant market for alcohol manufacturing and distribution companies, Giri said, adding it is among the top 7-8 markets for most businesses. Qualitatively, it has a larger pie as imported products account for 30% of all-India volumes. “Delhi is a showcase market for most brands that import products into India. Hence the transition could have been managed much better," he added.

Kyndal Group, which sells brands such as The Macallan, The Famous Grouse, Bootz Rum and Cutty Sark, however, said its new licence was registered and it should be able to start distributing by next week.

Other stakeholders said normalcy can be expected around January. As per the new policy, all 850 liquor vends, including 260 private outlets, had been given to private firms to run through an open tender. Following this order, about 40% of all liquor vends in Delhi shut shop on 1 October, while the remaining, operated by the government, closed down on 17 November, when the new policy came into effect. The move affected the sales during the festive season.

Amar Sinha, chief operating officer, Radico Khaitan, one of the top four manufacturers of Indian Made Foreign Liquor, said any amendment or reform in policy takes time to bear fruit. Being a large player, the company could register its premium brands and will start selling in about 300 outlets soon.

“We all need to be patient with the new policy application and execution. As of now, sales are happening in adequate number to feed demand through the outlets. We expect normalcy to return with the 900 outlets in three months."

varuni.k@livemint.com

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