Uttar Pradesh Government Approves New Liquor Policy

The Uttar Pradesh government introduced a new Excise Policy for the financial year 2025-26. This policy features key changes aimed at modernising the liquor trade in the state. Chief Minister Yogi Adityanath led the cabinet meeting which approved this comprehensive policy. The most change is the introduction of an e-lottery system for the allocation of liquor and cannabis shops.

Introduction of Composite Shops

The new policy introduces Composite Shops. This concept merges separate beer and foreign liquor outlets into a single unit. Consumers can now purchase various alcoholic beverages from one location. This aims to streamline the shopping experience and enhance convenience for customers.

E-Lottery System for Shop Allocation

For the first time in seven years, the UP government will allocate all types of liquor shops through an e-lottery system. Applicants can submit only one application. No individual can own more than two shops in the state. This system is designed to increase fairness and transparency in the allocation process.

Categorisation and Processing Fees

The government has divided areas into five categories, each with specific processing fees for different types of shops:

• Category One: Major cities like Lucknow and Agra have the highest fees. Country liquor shops are charged ₹65,000, while composite shops are ₹90,000.
• Category Two: Large cities not in Category One have slightly lower fees.
• Category Three: Municipal areas and their surroundings have further reduced fees.
• Category Four: Nagar Panchayat areas feature even lesser fees.
• Category Five: Rural areas have the lowest fees, promoting accessibility.

Operating Hours and Product Packaging

The operating hours for liquor shops remain unchanged at 10 am to 10 pm. This 12-hour limit has been consistent over the years. Additionally, the policy mandates that country liquor be sold in tetra packs rather than glass bottles. This change aims to enhance safety and reduce the risk of adulteration.

Minimum Guarantee Quota and Licensing Fees

The Minimum Guarantee Quota (MGQ) for country liquor has been increased by 10 per cent. The licensing fees for bulk liquor have also risen from ₹254 to ₹260 per litre. The policy supports farmers involved in fruit-based liquor production by ensuring a dedicated shop for their products in each district.

Support for Local Producers

The new Excise Policy aims to promote local farmers by ensuring that fruit-based liquor products have dedicated outlets. Licensing fees for these shops are set at ₹50,000 for divisional and district headquarters and ₹30,000 for other district locations.

Changes in Bottle Sizes

The policy introduces 90ml bottles in the regular category of foreign liquor. In the premium segment, both 60ml and 90ml bottles will now be available. This change caters to consumer preferences for smaller packaging.

Questions for UPSC:

1. Examine the impact of the e-lottery system on the allocation of liquor shops in Uttar Pradesh.
2. Discuss the significance of the introduction of Composite Shops in the context of consumer convenience.
3. Critically discuss the implications of the new licensing fees for local farmers engaged in liquor production.
4. With suitable examples, discuss the changes in product packaging regulations for liquor in Uttar Pradesh and their expected benefits.

Answer Hints:

1. Examine the impact of the e-lottery system on the allocation of liquor shops in Uttar Pradesh.

1. Introduces fairness and transparency in the allocation process.
2. Reduces corruption and favoritism in shop allocation.
3. Limits ownership to two shops per individual, promoting wider distribution.
4. Streamlines application process by allowing only one application per applicant.
5. Encourages competition among shop owners, potentially improving service quality.

2. Discuss the significance of the introduction of Composite Shops in the context of consumer convenience.

1. Merges beer and foreign liquor outlets, enhancing shopping efficiency.
2. Provides a one-stop location for diverse alcoholic beverages.
3. Aims to improve customer experience by reducing the need to visit multiple shops.
4. Potentially increases foot traffic and sales for shop owners.
5. Addresses consumer demand for convenience in purchasing alcohol.

3. Critically discuss the implications of the new licensing fees for local farmers engaged in liquor production.

1. Sets specific fees for fruit-based liquor shops, supporting local producers.
2. Higher fees may pose challenges for small-scale farmers, impacting their profitability.
3. Encourages establishment of dedicated shops, boosting local economies.
4. Increased fees for bulk liquor may lead to higher retail prices, affecting consumers.
5. Potential for improved product quality and safety due to regulated production.

4. With suitable examples, discuss the changes in product packaging regulations for liquor in Uttar Pradesh and their expected benefits.

1. Country liquor must now be sold in tetra packs instead of glass bottles.
2. Tetra packs enhance safety and reduce risks of adulteration.
3. Introduction of smaller bottle sizes (60ml and 90ml) caters to consumer preferences.
4. Smaller packaging may lead to reduced wastage and better portion control.
5. Improved packaging can enhance brand image and attract more customers.