The five percent ‘cow protection’ cess imposed by the U.P government on alcohol and the ongoing Lok Sabha elections have resulted in shortage of popular beer brands in the market. The UP government in January this year decided to impose 5 percent cess on alcohol to fund the cow protection programme .Every time there is a change in taxation, the retail price changes, and so does the label on the product. Every brand has to get an approval for these changes from the state’s Excise department before releasing the product in the market.
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“Every April, new policy comes into force. Every time you get into it, there is a delay of about a month because they re-register all the labels. The bureaucratic procedure is long and cumbersome as the files are pushed at different levels. It is an annual process and the distillery owners and liquor vendors know about it, so they keep extra stock for these situations. This year that process has got further delayed due to Lok Sabha elections,” said owner of a beer bar.
“The approval process is common to every state in India, but the delay is the longest in Uttar Pradesh. In UP, the delay has been thrice as long this time as the Excise department officials were busy with election duties and this delayed approval of new labels. So, if you walk into a bar or a wine shop anywhere in Uttar Pradesh today, very few brands are available, and most of them are strong beers,” said another bar owner.
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This is an additional blow for bar owners because most people in India who drink at bars prefer milder beers. “Sales dropped by nearly 40 per cent in April 2019, compared to March,” the owner of the beer bar said. This is a cumulative effect of a price hike, supply crunch in beer as a whole, and the non-availability of mild beer brands.
“The new Gau Raksha cess is Rs 5 per bottle of beer. It is quite severe considering beer is 95% water,” the bar owner added. In India, beer consumed outside home costs three and a half times more than the beer consumed at home. What is worse for suppliers in UP, nearly one lakh litres of expired beer worth Rs 3 crore was destroyed in April this year.
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“Beer is the only perishable liquor. By law, you have to quarantine it and the Excise department officers come and destroy it,” the bar owner added.
The wait to bring new stocks to shelves could be longer as Excise officials will only get back to their usual drill after the election.