Lucknow, Uttar Pradesh, with a population comparable to Germany, the United Kingdom, and France combined, has introduced an innovative ‘franchise fee’ model in its ambitious excise policy for 2024-2025. The state aims to attract top global liquor brands into a franchise-based fixed fee relationship, fostering co-production with local distilleries.
Senthil Pandian C, the state’s excise commissioner, stated, “We want the best foreign liquor made in UP, providing more variety for consumers and boosting revenue.”
The excise policy, approved by the UP cabinet, anticipates generating ₹58,000 crore in revenue for the fiscal year.
“If a franchise-produced brand gains popularity, and demand surpasses distilleries’ capacity, they can purchase foreign liquor for a year to meet demand and expand bottling capacity. This model enhances revenue,” explained Pandian.
In a bid to support beer vends, the state has eased regulations, allowing on-site consumption if owners have 100 square feet adjacent to the shop. The beer export fee has been reduced by 50 paise per litre to promote exports.
To curb street hooliganism, “permit rooms” for immediate beer consumption have been introduced, subject to a ₹5000 annual fee for vend owners.
Acknowledging the importance of not increasing prices of countrymade liquor, Pandian mentioned the decision to limit categories to four and promote grain-based countrymade liquor. He highlighted the global demand for grain-based alcohol and outlined measures to reduce prices without compromising revenue.
The excise policy introduces a license fee of ₹254 per bulk litre and a 10% increase in minimum guarantee quota (MGQ). These steps will result in a ₹5 reduction in the price of 42.8-degree liquor intensity grain-based countrymade alcohol (UPML), priced at ₹90. The new category with 36% liquor intensity will be priced at ₹75.
Molasses-based countrymade liquor prices are fixed at ₹50 (25-degree intensity) and ₹70 (36-degree intensity). UPML will be available in glass bottles and tetra packs.
