Key distillery denied licence as Madhya Pradesh raises stakes for liquor industry

Officials said authorities reviewed court records, inquiry reports, documentary evidence and previous cases involving the group before arriving at the decision. The government stated that “matters linked to alleged illegal transportation of liquor, use of forged permits and loss of government revenue were among the factors considered during the review process”.

The government also referred to directions issued by the high court, saying the court had made it clear that licence renewal applications must be decided independently on their merits and that no automatic right to renewal exists.

The state government said the decision reflected its commitment to transparency, accountability and rule-based governance.

“No individual, institution or establishment is above the law in Madhya Pradesh,” a government official said, adding that industries complying with regulations would continue to receive support while action would be taken against those violating legal provisions.

The move is significant because Som Distilleries is among the most prominent liquor manufacturers operating in Madhya Pradesh and has a substantial presence in the state’s alcohol market.

Som Distilleries had not publicly responded to the government’s decision.

Why the action

Headquartered in Bhopal, Som Distilleries and Breweries Ltd. is one of central India’s largest alcoholic beverage manufacturers and operates distillery, brewery and bottling facilities. The company is listed on Indian stock exchanges and markets several beer and Indian Made Foreign Liquor (IMFL) brands across multiple states.

The government’s action against Som Distilleries follows a significant ruling of the Madhya Pradesh High Court earlier this year, which upheld the suspension of multiple excise licences held by the company and its group entities.

In a March 23 judgment, Justice Vivek Agarwal reaffirmed the state’s wide regulatory powers over the liquor trade, observing that dealing in liquor is not a constitutionally protected right. “Firstly, liquor business is not a fundamental right and secondly, when the test of proportionality is applied, then on that touchstone also, decision of the authority being within the framework of the Excise Act and the Rules framed thereunder, cannot be faulted with,” the court said while dismissing the company’s petition.

The case arose from an order issued by the Excise Commissioner on February 4, 2025, suspending eight licences held by Som Distilleries and associated entities. The action stemmed from a show-cause notice issued after criminal convictions were secured in a case linked to the illegal transportation of liquor.

According to court records, the matter traces back to a 2011 incident in which a truck carrying approximately 1,200 boxes of foreign liquor was intercepted on the Mhow-Neemuch road. Investigators found that the consignment was allegedly being transported using forged transit permits, resulting in a loss of excise revenue to the state. A trial court later convicted several individuals connected to the company, including supervisors, directors and transport personnel, under provisions of the Madhya Pradesh Excise Act and the Indian Penal Code relating to cheating, forgery and criminal conspiracy.

Som Distilleries had argued that the state’s action was arbitrary and that the show-cause notice related only to licences that had expired in March 2024. The company contended that licences granted in subsequent years were fresh grants rather than renewals and therefore could not be affected by earlier proceedings. It also claimed the notice was vague and violated principles of natural justice.