Hyderabad is bracing for a potential liquor supply crisis as new stores prepare to open across Telangana on December 1, 2024. The grand opening of liquor outlets considered for the 2025-27 period faces uncertainty due to mounting concerns about supply chain disruptions.
Payment Dispute Threatens Liquor Supply
Major liquor companies have formally alerted the state government about an impending supply shortage resulting from significant outstanding dues. Three key companies that supply 80% of Telangana's liquor have expressed serious concerns about the payment situation. In a strongly worded letter, these firms warned that if the issue of pending payments remains unresolved, supply chains could be severely affected.
The liquor companies have proposed a practical solution: using application-fee adjustments for new liquor store licenses to balance the outstanding dues. However, the state government has yet to respond to this proposal or address the payment concerns raised by the suppliers.
Festive Season Demand Creates Perfect Storm
The timing of this potential crisis couldn't be worse for the Excise Department. Telangana's 2,620 liquor stores are expecting a significant surge in demand during multiple upcoming events. The department anticipates robust sales during local body elections, New Year's Eve celebrations, and the massive Medaram Jatara festival scheduled for January and February.
With political parties and individuals expected to spend freely during the election cycle, officials predict a substantial spike in liquor consumption. Once the polls conclude, year-end festivities will take over, with celebrations likely to extend into the first week of January. The subsequent weeks will feature Sankranti festivities followed by the Medaram Jatara, which attracts over one crore people throughout Telangana.
Revenue Concerns and Market Dynamics
Excise Department officials are particularly concerned about the potential impact on state revenue. Despite a decrease in the number of applications for new stores, liquor revenue has shown a consistent upward trend. This makes adequate stocking crucial for maintaining the revenue stream.
The department recognizes the need for proactive measures to ensure the state doesn't face shortages during the critical three-month period spanning December through February. With local body poll processes already generating a festive buzz in villages, and more than a crore people expected for Medaram Jatara, the government is making full preparations to manage the situation.
The combination of political spending, New Year celebrations, and major cultural events creates a perfect storm of demand that could test Telangana's liquor supply chain like never before. How the government addresses the payment dispute with liquor companies will determine whether stores can adequately meet this unprecedented demand.
