The excise department in Lucknow conducted the third round of the lottery draw for leftover model shops, but failed to secure any bidders. While composite shops have been taken over, entrepreneurs with a background in the liquor business remain hesitant to operate model shops, citing a lack of financial viability. As a result, 41% of model shop owners have pulled out of the business during the current fiscal year.
Declining Numbers of Liquor Shops
As of March 31, Lucknow had 572 country liquor shops, 400 composite shops, and 56 model shops. However, currently, only 507 country liquor shops, 399 composite shops, and a mere 33 model shops are operational. Despite a 10% reduction in licence fees compared to the previous year for model and country liquor shops, retailers continue to avoid the business.
Industry Concerns
Devesh Jaiswal, spokesperson for the state liquor traders' association, stated, "Until the financial viability of retail shop operations improves, no one who understands the liquor business will be interested in running a model shop. The excise department needs to rationalise the licence fees, as paying crores of rupees for a model shop licence is not lucrative for a businessman suffering financial losses within a year."
In the prime area of Gomtinagar, four model shops that existed until March 31 have not been renewed. Two are currently operating under temporary licences, an alternative arrangement by the excise department allowing retailers to pay a portion of the licence fees for a short period to assess feasibility.
Licence Fee Reduction Not Enough
The licence fee for a model shop near Husadia crossing was reduced from Rs 2.18 crore to Rs 1.96 crore. However, a retailer commented, "It is still not profitable to operate this shop as it does not attract enough crowd since composite shops have opened in multiple locations in Gomtinagar."
Excise Department's Efforts
District excise officer of Lucknow, Karunendra Singh, said, "We are urging existing retailers to improve the ambience and interiors of model shops. This could generate increased footfall as people look for affordable watering holes. Simultaneously, we are coordinating with the police department to conduct a sustained drive against restaurants and canteens that illegally allow liquor consumption on their premises."
The department is also trying to convince country liquor shop owners about the changed policy framework, which aims to encourage increased sales volumes for multiple brands and products. A retailer who exited the business after operating a shop in Narhi locality of Hazratganj noted, "In the country liquor segment, one company completely dominates demand within cities and urban pockets. We hope to see some turnaround this time as the policy has been revised to encourage offtake of other liquor brands as well."
