Hoteliers in Mumbai who are facing a steep drop in business because of the Supreme Court ban on liquor vending outlets close to highways are now facing a new financial problem. With their liquor vending licences revoked, most of the affected hotels have been piled up with a huge inventory of booze, which they will now have to forfeit to the government. Interestingly, even the state government does not know what to do with the liquor that is supposed to be seized as per the law. Preliminary estimates suggest that the total value of booze that the state government may have to seize and keep may be worth Rs 400 crore to Rs 500 crore.
According to the Bombay Prohibition Act, in case the licence expires, the licencee needs to surrender the whole of the unsold stock of rectified spirit to the Excise department.
“Any big outlet would have an inventory of around 10 lakh while a smaller place would have an inventory of 2-3 lakh. We are first losing our business and, under the law, we also have to surrender this entire stock to the government for which we will not get a single penny,” said Vishwapal Shetty, Joint Secretary of the Indian Hotel and Restaurant Association.
The state Excise department has still not started collecting the unsold liquor stock from the vendors whose licences have lapsed. Excise officials claimed that it was a herculean task and they do not have space to keep the seized liquor. “We will have to collect and store liquor from 15,000 liquor vending outlets. Where are we going to store these many liquor bottles. We hope some solution can be found to tide over this crisis,” said a senior state excise official.
Hotel owners claim that giving the inventory back to the government would be an additional loss to business owners. “We have already paid or will have to pay our suppliers for this inventory. However when the government seizes this inventory it will not give us any money,” Shetty said.
There are a total of 25,513 liquor vending licencees in the state, of which 15,699 lie within 500 metre distance of highways and have been impacted. Of these, nearly 10,000 are bars and restaurants, of which 450 are located in Mumbai.
The Indian Hotel And Restaurant Association, which held a press conference on Monday said the shut down would directly and indirectly impact the livelihood of nearly 8 to 10 lakh residents of the state.
It requested the government to work out a solution which included the possibility of denotifying highways and handing them over to local municipal bodies. “The denotification of highways will help nearly 80 to 85 per cent of vending units that have shut down to start their operations once again,” said Adarsh Shetty. AHAR president.
He claimed that the shutdown had massive financial implications in terms of loss of business. “On an average, each unit in Mumbai would be handling a daily business of around Rs 50,000. In one day you have shut down 450 such businesses in Mumbai. You can work out the loss,” said Shetty.
The organisation claimed that if the state did not intervene it would lead to people veering towards bootlegging and giving a fillip to the spurious liquor industry. “If the state does not do anything it will crate an environment for illegal business to thrive. You may face problems of spurious liquor because of this ban,” Shetty added.