Hyderabad: The government’s grand design of awarding liquor licences by draw of lots came into being Tuesday with officials dipping their hands into boxes containing a total of 68,284 applications and coming up with the winners of 5,703 vends across the state. Licences for 893 vends went abegging, having not received even one application. Excise officials said there will be a fresh draw of lots for these orphan vends in the days ahead.
Although the new policy was brought in to rid the state of liquor syndicates, sources in the trade said retailers still managed to get around the new policy by an array of devices. In Nizamabad district for instance, eight liquor vendors reportedly ganged up and filed multiple applications for a select number of vends. “The licences won will be shared and farmed out to belt shops,” said a merchant who has been in the trade for last 10 years. Similarly, a 10-member liquor syndicate in Nalgonda district pooled Rs 1 crore to file multiple applications -- each costing Rs 25,000 -- to maximise their chances of bagging six shops on the Hyderabad-Vijayawada highway.
Indicative of multiple bidding by traders, many applications were filed in the name of women. One trader filed three applications - in the name of his wife and son and himself - for a shops in Somasekharapuram of Nellore town. As evidence of this tactic, there was, among the crowds seen at bidding centres, a strong presence of women -- with children in tow. Trade sources said that if the government won’t hold auctions of vends, liquor syndicates will. Many of the cartels plan to buy out licence winners once the dust settles. That may trigger bidding wars that used to be seen until two years ago.
Sources in the trade said retailers still managed to get around the new policy by an array of devices.
“We plan to buy out licensees for a good premium or a share of the stake,” said a politician-booze trader from Karimnagar district. As is prevalent in pharma retail, the formal licencee will hand over operations to syndicate figures and enjoy a part of the proceeds.
One businessman from Ongole who had never run a liquor shop said he invested about Rs 2 lakh to file applications for eight different outlets. “If I win, I’ll sell it to whoever gives me a good offer,” he said.
In some instance, sources in the trade said, liquor syndicates were being formed on an ad hoc basis. For example, about 10 shops received 2-10 applications in Bhongir division in Nalgonda district. It is learnt that the applicants quickly formed a syndicate and came to an understanding that whoever wins the outlets, the others will get a piece of the pie.
Old cartels are also said to have received tipoffs from excise officials about vends that had not received any application until the previous night. Sources said that about four shops in Nalgonda town did not receive any applications till Monday night. Some excise officials reportedly leaked the news to their ‘trader friends’ who in turn filed eleventh hour applications.