Why in news:

• Terming the existing excise policy as speculative, the liquor traders in Punjab have sought changes in it for 2023-24 to end dominance of bigger players and encourage local traders.

Key Points:

• The Bhagwant Mann-led government has initiated the process of framing its second excise policy, and officials are holding meetings with stakeholders for feedback.
• In order to break the monopoly of wholesalers, traders are pressing for the abolition of super L-1 – one of the most contentious provisions in the policy. The L-1 licence is required to supply liquor to retail vends. Traders want retailers, who own licences, to be granted wholesale licences as well and allowed to lift stock directly from distilleries.

Quota rationalisation has been proposed

• Further, the traders feel the move to keep open quota for Indian-made foreign liquor (IMFL) in the existing policy backfired as it led to glut in market, which forced vends to resort in price war, causing heavy losses. They recommend old practice of fixing IMFL and country liquor quota, and an option to lift additional quota at reasonable excise duty once the allocated quota gets exhausted.
• According to the local traders, the government was hoping that cut in rates will lead to an increase in sales, which would push the revenue. However, according to them, the sales have gone up but not in proportion to the reduction of rate.
• The traders have further complained that the brands of IMFL with the lowest EDP (ex-distillery price) competed with country liquor sales, leading to accumulation of unsold allotted quota of country liquor and causing indirect loss of revenue to the licensee.
• For promoting small traders, the government has been requested to reduce the size of groups and the amount of security should not be more than 12%. Most traders favour allotting business through e-tender, which was started last year, and doing away with the draw of lots.