Maharashtra to be worst hit by highway liquor ban; Rs 7000 crore revenue hit

The Supreme Court’s decision to ban sale of liquor near all highways, which began on April 1, will impact the state of Maharashtra the most with approximately Rs 7,000 crore revenue hit, Bloomberg report on Monday quoted a CLSA report.

The report pointed out that as much as Rs 20,000 crore of revenue from liquor for state governments would be impacted.

Over 15,000 outlets in the state of Maharashtra, which will be the worst impacted, will have to run dry and the report said that this would amount to Rs 7,000 crore hit.

States of Rajasthan and Odisha came in second and third to be impacted with the ban with Rs 2,000 crore and Rs 1,100 crore estimated impact.

As per the decision of the SC hotels, pubs and restaurants within 500 meters distance of national and state highways that serve alcohol, too, would have to take it off the menu to keep the roads safe.

This ban was announced in the month of December and on March 31 the SC excluded Sikkim and Meghalaya from this 500 metre limit.

It also allowed the licences issued before December 15, 2016, and valid beyond April 2017 to continue until the licence expires, or September 30, 2017, whichever is earlier.

The State-wise industry volume of liquor consumption Tamil Nadu was the highest with 18% liquor consumption followed by Karnataka at 17%.

Shares of United Spirits spiralled on Monday on BSE Sensex. The company’s shares were down 5.33%  trading at Rs 2,057.50 per share on BSE Sensex intraday, its steepest monthly drop since November.

A report by Credit Suisse said that India Top Court’s order will have a 6-12 month impact as most liquor stores, consumers within cities will relocate and State governments have started reclassifying highways.