The Supreme Court has clarified that the highway liquor ban imposed is not applicable to licensed bars and beverage outlets that are functional within municipal areas. The clarification has come as a relief to liquor companies as there was a lot of ambiguity and uncertainty due to the ban along with the prohibition announced by many states.
In December 2016, the apex court had imposed a ban on the sale of liquor within 500 metres of National and State Highways which came into effect on April 1, 2017. A petition was filed in the court to review its decision, but it upheld the original ban. However, the court awarded some relaxation to states of Sikkim and Meghalaya by reducing the distance to 220 metres in towns which have a population of less than 20,000.
The liquor industry witnessed a steep fall in sales pertaining to the ban since April. Riyaz Amlani, president of National Restaurant Association of India, said: “now licenses will be renewed and in another two to four weeks the industry will settle down and get back to business."
Since the clarification by Supreme Court, liquor stocks went up by 2-15%. United Spirits gained 6%, Globus Spirits 5%, Pincon Spirits 8%, Radico Khaitan 5% and United Breweries gained around 2%.
During the ban, more than Rs. 1000 crore hospitality business was lost. The spirits industry was down by about 4% and the beer industry was down by 2%. With this new order of the Supreme Court, it is expected that 85% of the businesses will be functional once again.
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