Liquor merchants across Karnataka are seeking relief from the state’s excise regulations, which they claim are making it increasingly difficult to maintain profitable operations. In a recent memorandum submitted to Chief Minister Siddaramaiah, the Karnataka State Liquor Merchants’ Development Co-operative Society outlined a series of demands aimed at easing the financial strain on business owners and improving the overall viability of their operations.
A major point of contention for the liquor merchants is the state’s 10% profit margin cap on liquor sales. According to the association, after accounting for overheads such as excise license fees, electricity bills, staff salaries, rent, and transportation, the actual profit margin falls to a meagre 4-5%. They have requested that the government increase the profit margin to 15%, arguing that this increase is essential to sustaining their businesses in light of rising operational costs.
Kaveri, a representative from the society, highlighted the challenging economic environment in which liquor merchants are operating. “We are barely managing to stay afloat under the current conditions. The profit margins are insufficient when we factor in all the costs involved in running a business. We urge the government to consider our request for a fairer and more realistic profit margin,” she said during a meeting with the CM’s office.
The association has also raised concerns about the existing rule that mandates the suspension of a merchant’s license after three registered cases. They have requested that the government amend the rule to allow for more flexibility, considering the severity and context of the cases. The merchants suggested that district excise officers be given the discretion to decide whether a license suspension is warranted, based on the merit of each individual case.
While the merchants are asking for some relief from the existing rules, they also emphasised their desire for stability within the sector. They pointed out that Karnataka’s excise policies have been widely regarded as a model for other states, and they have requested that the government refrain from making drastic changes to these policies. The stability in the regulatory framework is seen as crucial for the continued growth and success of liquor businesses in the state.
The society has also proposed revising the norms for granting CL-7 licenses, which are required for bars and liquor stores. The current criteria for urban areas include a minimum of 15 rooms, and 10 rooms for other areas, in addition to facilities like separate restrooms. The merchants argued that these requirements are too rigid and costly for smaller businesses. They have asked the government to review the requirements and consider reducing the room count or making the rules more adaptable to the size and nature of different establishments.
One of the more sensitive issues raised in the meeting was the harassment by excise officials. Merchants have complained of undue harassment and arbitrary actions from some excise department staff, which they believe are discouraging business owners and adding to their operational difficulties. The society has demanded swift legal action against officials or staff who engage in such practices, and has called for the establishment of a grievance redressal mechanism to allow merchants to report such instances without fear of reprisal.
The rising operational expenses, coupled with stringent regulations, have made it increasingly difficult for liquor merchants to maintain profitability. The association has urged CM Siddaramaiah to direct the Excise Department to provide clarity and relief on specific issues that are complicating business operations. These include simplifying the licensing process, reducing bureaucratic delays, and providing support in managing rising costs.
The meeting between the liquor merchants and the Chief Minister underscores the growing frustration within the sector. The merchants are seeking a balanced approach that allows for regulatory enforcement while also supporting the financial health of their businesses. As the industry faces mounting pressures from rising costs and stringent rules, the Karnataka government is now tasked with finding a way to address these concerns without compromising on public safety or regulatory standards.
Liquor merchants across the state are closely watching how the government responds to their requests, with many hoping that the relief measures will help sustain their businesses and ensure the continued growth of the sector. The outcome of this dialogue will likely have significant implications for the future of Karnataka’s liquor industry.