Punjab's Liquor Retail Market Faces Significant Challenges in Bid Allocation
In a development highlighting ongoing difficulties in Punjab's excise sector, a substantial number of liquor retail groups continue to remain without bidders even after multiple rounds of e-tendering. This cautious response from traders to the state's excise policy for the 2026–27 period has left several vends yet to be operationalised, raising concerns about revenue generation and market stability.
Policy Framework and Renewal Statistics
Under the current excise policy, the Punjab government permitted existing liquor traders to renew their licences. Official data reveals that out of 207 groups across the state, comprising a total of 6,378 vends, only 147 groups were successfully renewed. Despite subsequent efforts through e-tendering, 52 groups—encompassing approximately 1,200 retail vends—remain unallotted, indicating a significant gap in market participation.
The groups that were not renewed are being allocated through e-tendering, following the same procedure established for the 2025–26 period. The reserve price for these groups has been fixed by applying a 6.5% increase over the previous year's discovered licence fee, a move intended to align with inflationary trends but one that traders argue may be contributing to the lack of bids.
Geographical Distribution of Unallocated Vends
The Department of Excise has placed these unallocated groups for bidding across three key zones: Patiala, Jalandhar, and Ferozepur. The highest concentration of such vends is found in specific locations, with Zira leading at 85 vends, followed closely by Lehra with 74, and Ferozepur Cantonment with 68. Other notable areas include Baghapurana (60 vends), Nihal Khera (53), Begowal (47), and Shalimar Bagh (46).
Balachaur City accounts for 32 vends, while several other key locations show significant numbers: Kurali, New Chandigarh, Hazipur, and Dasuya in Hoshiarpur each have 25 vends. Bharatgarh follows with 24, Amritsar Railway Station with 23, Amritsar City Centre with 22, and Khanna-2 with 21 vends. This widespread distribution underscores the broad-based nature of the issue across Punjab's retail liquor landscape.
Policy Flexibility and Adjustments
The excise policy provides authorities with flexibility to address such allocation challenges. Deputy commissioners (excise)-cum-collectors of the concerned zones are authorised to modify group composition, including changes in geographical area or revenue limits, to enhance viability. In instances where groups are merged, the newly formed unit is treated as a single group, with the stipulation that overall excise revenue remains unaffected.
Furthermore, if bids continue to be elusive, the reserve price of a group can be reduced by the Financial Commissioner (Excise), Punjab, based on recommendations from a committee comprising district and range-level excise officials. In the current round, reserve prices have already been reduced by 3% initially, followed by an additional 2% reduction in an effort to stimulate participation and attract more bidders.
Market Sentiment and Trader Concerns
Retail traders have expressed that market sentiment remains notably weak, citing losses incurred during the 2025–26 financial year and ongoing concerns over business viability. Many indicate that reserve prices may need to be reduced further—in some cases by 8% to 12%—to make bidding more attractive and feasible for potential operators.
Traders also highlight the continuation of the open Indian Made Foreign Liquor (IMFL) quota system as a point of contention. Despite demands to shift to a fixed quota model similar to that used for country liquor (PML), the existing system persists, adding to operational uncertainties and financial pressures.
Regulatory Limits and Future Steps
The policy stipulates that ordinarily, no single entity will be allotted more than five excise groups through e-tender. However, this limit may be relaxed or reduced by the Financial Commissioner, depending on local conditions and market dynamics, providing a potential avenue for increased participation from larger operators.
The next round of e-tendering is scheduled for March 27, offering another opportunity for the allocation of these remaining groups. Authorities remain hopeful that the combined measures of price adjustments and policy flexibility will yield better results in the upcoming bidding process.
This situation reflects broader challenges in balancing revenue objectives with market realities in Punjab's excise sector, as stakeholders navigate economic pressures and regulatory frameworks.
