Tirupati: After the Andhra Pradesh government slashed the prices of liquor, with effect from December 19, the state has been witnessing an uptick in sales volume of both Indian Made Liquor (IML) as well as beer.
The sales volume of IML has increased by 60-65 per cent while that of beer has increased by 80-83 per cent approximately as a result of price reduction. There is also a slight increase in sales value by 30 per cent as those habituated to cheap liquor are now opting for premium brands as prices have been reduced.
In a bid to curb circulation of non-duty paid liquor (NDPL) and check cross-border smuggling and illicit distillation, the state government slashed liquor prices after rationalisation of VAT, special margin rate and additional excise duty. This resulted in a 15-20 per cent fall in the cost of IML and at least Rs 20-30 on a bottle of beer.
Official statistics show that on December 17 alone, before the price cut, a total of 77,951 crates of IML and 18,046 crates of beer were sold in the entire state, fetching the authorities Rs. 79.45 crore. A week post the price cut, a total of 1,24,898 crates of IML and 32,726 crates of beer were sold, fetching Rs 102.97 crore, whereas, on December 27, a total of 1,28,009 crates of IML and 32,905 crates of beer were sold in the state, bringing in revenues of Rs. 105.28 crore.
“The daily sales volume has increased substantially after liquor prices were slashed. However, the daily revenue collection has been more or less the same, and it crossed Rs. 100 crore mark in the last two days”, a senior official confirmed, adding that the price cut had pushed up sales.
He also said those consuming cheap liquor for some time because of the higher prices on premium brands may have shifted back to their old brands after the price cut, thereby pushing up the sales values.
“Following a reduction in prices, there has also been a drop in circulation of non-duty paid liquor smuggling in the state, which may also lead to an increase in the sales volume," he added.
On the other hand, the government is also hoping that the smuggling of NDPL will reduce following the price reduction.
The officials, however, fear that on the flip side, it will make the objective of implementing phased liquor prohibition a difficult task. The government had increased liquor prices substantially in October, 2019 and further by another 75 per cent during the Covid-19 pandemic to further discourage consumption.
