A booze ban stresses Indian leisure business
Print Edition
WHEN Shailja Singh headed to her favourite bar for a post-work beer this week she found it shut, victim of a Supreme Court ruling that has stopped India’s burgeoning alcohol and leisure industries in their tracks.
Thousands of liquor outlets were forced to close on April 1 after the order, which barred the sale of alcohol within a 500-meter range of a highway.
The ruling was meant to curb drink driving on India’s roads, the world’s deadliest, but has also shut down many bars, restaurants and hotels that serve tourists and office workers like Singh.
Fortunately for the 23-year-old, only half the bar-and restaurant-filled area in Gurgaon, a satellite city of New Delhi, is affected.
In a sign of the ruling’s arbitrary impact, the bars that fall just outside the 500-meter range are open, meaning she won’t have to go far to get a drink.
But for the businesses affected, the problem is not so easily solved.
“This is one of the most regressive steps that I’ve seen,” said one investor in a pub forced to go dry.
“The prime minister is talking about improving the ease of doing business. But first tell us can we do business to begin with? What are we telling foreign investors — overnight your investments can go?” said the investor, who asked not to be named.
India’s expanding middle class has made it a sparkling market for the alcohol industry.
In 2016 India alcohol sales were worth US$40 billion, making it the eighth largest market by value globally.
It is expected to grow by 6 percent on average annually for the next four years, according to a Euromonitor International estimate.
“The liquor players, the tourism industry, they all had a strategy in place when they set up their businesses and then this verdict came in,” said an analyst at a Mumbai brokerage who asked not be named.
“This was completely unexpected and they will have to restrategize.”
Share prices of listed alcohol makers have already been hit.
United Spirits, which makes Black Label whisky and Smirnoff vodka in India, saw its shares fall by around 9 percent on the Bombay Stock Exchange in the days immediately after the ban, despite a rising market.
Hotel and bar operators have also been affected.
Shahira Khan, assistant brand manager at The Beer Cafe chain of bars, said business was struggling.
“Earlier on normal weekdays we would get around 200 people each day. On weekends, around 250 people would walk in. Now we are hardly getting anyone,” she said.
“After all, why would people come in? There is no beer at The Beer Cafe.”
Staff at a luxury hotel in Jaipur, a popular tourist destination in northern India, said they’d had several cancellations after they were forced to stop selling alcohol because the property falls within 500 meters of a highway.
The manager of the Chokhi Dhani said one group of Russian tourists were incensed when they were told they couldn’t get a drink.
“We tried telling them that it was a court order and we couldn’t do anything about it but they were obviously not pleased,” hotel manager Nupur Jain said.
“They complained about how it spoiled all their plans and that they’d come there to have a good time.”
State governments and entrepreneurs have begun finding creative ways around the 500-metr limit.
Some states like Punjab have begun reclassifying highways as local roads to escape the ban, according to media reports. Meanwhile some shopping malls and bar complexes are reportedly rerouting customers to a different entrance to increase their official distance from the road.
India has the world’s deadliest roads with nearly 150,000 people killed in 2015, according to the ministry of road transport and highways.
Of those, 6,755 deaths were due to drunk driving.
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