Facing mounting financial pressures, liquor traders in Punjab have formally requested the state government to reconsider the scale of retail groupings in the upcoming excise policy for 2026–27. They argue that reducing the size of these groups would enhance business viability, prevent cartel formation, and encourage broader participation.
Core Demand: Reducing Financial Burden
The primary appeal from the traders' community is to significantly downsize the retail groups. Under the current excise policy, the state has 207 groups, with each valued between Rs 40 crore and Rs 50 crore. Traders have pressed officials to bring this down to a Rs 15–25 crore range.
They contend that the existing structure of large groups places an excessive financial load on licence holders. This high entry barrier effectively discourages small and mid-sized operators from entering the trade. The number of groups was previously reduced from 236 to 207, which encompass a total of 6,374 vends across Punjab.
Rationale and Additional Demands
Traders believe that smaller group sizes would lower the required upfront investment and reduce dependency on costly informal borrowing. They also claim this move would aid the government by improving revenue recovery and minimising potential leakages. A trader highlighted that increasing the number of groups by reducing their size would allow smaller players to participate, thereby creating more employment opportunities.
Beyond group resizing, several other demands were raised in meetings with government officials:
- Abolition of the tender system: Traders seek a return to the allotment of retail business through a lottery system. The government had reverted to an e-tender process last year, mirroring its 2022 policy.
- Quota alignment: They requested that Indian-made foreign liquor (IMFL) quota norms be aligned with those for Punjab-medium liquor (PML). Additionally, they proposed a graded additional excise duty on IMFL to bring more predictability to pricing.
- Border business protection: To combat cross-border shopping, traders suggested allowing beer manufactured in neighbouring states to be sold at a nominal import fee in Punjab's border districts.
- Label renewal: They sought automatic renewal of brand labels approved for the 2025–26 excise year after payment of revised levies to prevent supply disruption from April 1, 2026.
- Other requests include continuing temporary retail sheds in districts lacking permanent infrastructure and fixing uniform district-level rates for liquor supply at marriage palaces and hotels.
Policy Context and Government Response
The government has maintained an open IMFL quota in successive policies despite opposition from traders. Meanwhile, the annual quota for PML has seen a 3% increase, rising from 8.286 crore proof litres in 2024–25 to 8.534 crore proof litres in 2025–26.
State officials have stated that all proposals from the traders will be thoroughly examined during consultations before the 2026–27 excise policy is finalised. However, traders remain steadfast that resizing the retail groups is the most critical step towards ensuring the trade's financial sustainability and making it easier for the authorities to regulate.
For the traders, this reform is not just about easing entry but about reshaping the market dynamics of Punjab's liquor industry for the future.
