The Karnataka government has established a significant new financial benchmark for liquor retail in its capital, setting a base price of Rs 1.5 crore for specific types of liquor licences in Bengaluru. This move formalises the high market value of permits that have become scarce commodities, as the state has not issued new ones for over three decades.
A Licence Freeze Creates Prized Assets
The licences in question are known as CL-2 and CL-9 permits. The state excise department's policy has made these licences exceptionally valuable, as no new CL-2 or CL-9 licences have been issued since 1992. This long-standing freeze means existing permits are transferred or renewed but never newly created, turning them into coveted assets for businesses in the liquor trade.
Official data reveals the limited number of these permits in circulation. Across Karnataka, there are currently 3,995 active CL-2 licences and 3,637 active CL-9 licences. Holders of these permits must renew them annually with the state excise department to maintain their legality. The recent government order now puts an official minimum price tag on these transfers within Bengaluru's jurisdiction.
Understanding the Licence Categories and Impact
The CL-2 and CL-9 licences are crucial for the retail and service of Indian Made Foreign Liquor (IMFL). A CL-2 licence typically allows for the establishment of a wine shop, while a CL-9 licence is often associated with bars and pubs. The government's decision to set a Rs 1.5 crore base price effectively acknowledges the massive premium these permits command on the open market due to their scarcity.
This pricing directive is expected to bring more transparency and standardisation to the process of transferring these licences between parties. Previously, the sale value was often determined through private negotiation, but the state has now instituted a formal floor price. The order, dated 24 December 2025, provides a clear regulatory framework for all future transactions involving these permits in the city.
Market Consequences and Future Outlook
The establishment of a base price is likely to have several immediate effects. It legitimises the high economic value of these permits and may lead to increased government revenue through stamp duties and registration fees during transfers. For existing licence holders, it solidifies the worth of their asset. For aspiring entrants into the liquor retail sector in Bengaluru, it sets a clear, and high, entry cost.
Industry observers note that this move could potentially reduce under-the-table premiums and bring more transactions into the official fold. However, it also raises questions about market accessibility and consolidation, as only established players may afford the substantial investment required. The state's excise policy, unchanged since 1992 regarding new issuances, continues to shape the landscape of liquor retail in Bengaluru, with this new price rule being the latest chapter.
