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License Fee Should Be Charged On a Pro-Rata Basis

18 June 2020 by Ambrosia Magazine


With the COVID-19 pandemic bringing the industry to a standstill, continuous efforts are being made by the industry stakeholders and manufacturers to work on a plan for the future. Ambrosia speaks to Deepak Roy, Chairman of CIABC and on the Board of Allied Blenders and Distillers Pvt. Ltd about CIABC’s efforts towards the industry.

What is the plan of action for CIABC to revive the industry?
CIABC’s role is to convince State Governments to open up liquor trade as soon as possible within Covid19 guidelines. Governments need to open more shops, take people off shops through online home delivery systems, which partially they have already and also ease the procedural bottlenecks at the factories. Also facilitate cash rotation for companies as the industry is geared up to adapt itself for the new world during and post-Corona. Governments need to move rapidly to reshape regulations.

Despite bans being lifted how can the operations be normalised?
Since bans have generally been lifted and trade is being permitted in most states, the normalisation of operations is on level of threat perceptions, bans may keep getting imposed and removed on localised scale. That seems to be the approach for all non-essential items currently, which alcohol is considered to be in India. We understand that health is a priority and will support Governments in such moves.

Can CIABC work in tandem with NRAI to get the government to partially open restaurants especially in five star hotels and stand-alone outlets?
As a responsible body, we trust that the Government is best placed to decide when is appropriate time to restart restaurants. We understand and appreciate the challenges social outings bring to social distancing. We also share the business pains of the bars and restaurants industry in light of the shutdown. From our end we have made several suggestions to the Government to help out the industry such as permission to sell stock in packaged form as takeaways. Some states have already implemented it.

How can CIABC help the government to open the sales of liquor further, offer free masks and discounted sanitizers to help in the containment of the virus?
CIABC will continue to work hand-in-hand with the government as well as its members to encourage all efforts to lessen the spread of COVID. Our members are already making individual efforts in supplying alcohol based sanitizers and will keep doing from time to time the campaigns or distribution of masks. These will not be CIABC led initiatives but led by our members individually.

What concessions would you expect from the government to compensate for lost revenues?
Unlike many other industries, we do not seek concessions from the Government. All we seek is implementation of fair trade principles, which under any circumstances are right of a legally permitted industry. These include, charging of licenses on pro rata basis (reducing the license fee to the extent of non-sale days).
State governments must start paying our members on due dates. Several states are delaying payments and this is causing a lot of strain on stretched resources in lieu of lower business. Expect states to take steps to avoid crowding at outlets by improving ease of access to alcohol for desirous consumers; a. Increase the number of retail outlets. b. Stretch shop timings to avoid social crowding. c. Allow home deliveries and or online sale of liquor. Not to increase excise duty indiscriminately which will have dampening effect on the volumes of the industry.

Do you think the license fees can be reduced for next year?
The license fee should be charged on a pro rata basis taking into account the loss of sale due closure or lockdown.

Is CIABC planning to launch a digital campaign to underline the importance of opening up liquor shops which would target consumers who form the vote banks?
There are no plans to launch digital campaign. We are in direct touch with almost all state governments and would like to work hand in hand with the governments to balance their revenue needs as well as ensure that social crowding does not spread COVID.

This report was contributed by knowledge partner: