Liquor shops undercut Beverages Corporation

HYDERABAD: A few wine shops in the city are selling liquor at a loss and yet registering profits of Rs 1 crore a month! It may be surprising but these retailers are paid commissions by liquor companies for lifting huge quantities of their brands from the AP State Beverages Corporation.
After thus undercutting the official issue price, they sell the stock to other retailers at a lesser price.
The retailers sell stock to other wine dealers in the city and in Nalgonda, Kurnool and Ranga Reddy districts.
According to the general secretary of the AP Wine Dealers’ Association D Venkateshwara Rao, of the 350 wine shops and bars in the city, only about five shops are flourishing in this manner.
“The average revenue earned by a wine shop in the city is between Rs 90 lakh and Rs 1.5 crore a year. These people make that kind of money every month by establishing their monopoly through such illegal means,� he said.
According to Excise Laws (IL 24), wine shops are not supposed to deal in bulk sales and cannot resell the bottles to other retailers
However, according to Rao, despite the Wine Dealer’s Association representing to the Excise and Prohibition department on this issue, they did not take any action.
As the ‘wholesaler-retailers’ get price discounts from liquor companies, they are able to provide their customers with bottles at prices on par or lesser than the issue price.
Thus these shops sell Haywards Premium Lager Beer on par with the issue price of Rs 32, Royal Challenge whiskey which is sold by the Beverages Corporation at Rs 459 a bottle is sold at Rs 450 and Imperial Blue which costs Rs 219 to a retailer is sold by them at Rs 200.
This price war edged out 25 liquor shops located near these shops in Afzalgunj and Kachiguda this year from business.
Admits a Beverages Corporation official, “We know that these retailers are undercutting and taking over the market. But there is nothing that we can do as our job is only to supply the stock. The policing task is left to the excise department.�
When contacted, the excise department officials promised to take action against the erring retailers.