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Liquor Supply Spat: While Hotel lobby body says lift the ban on supply, wine traders say they should pay 50% percent dues first

HRWAI feels, the wine traders association is exploiting the monopolistic position it enjoys on supplies in Maharashtra.
Oct 23, 2020 / 07:37 PM IST
Representative Image
Representative Image

A scuffle has erupted between wine traders and hotel and restaurant associations which may lead to restaurateurs running out of liquor.

The centrepiece of a spat is a  No Objection Certificate (NOC) that hotel companies have to seek from wine suppliers. Without this NOC, they cannot get a fresh supply of wine.

Hotel Restaurant Association of Western India (HRAWI) has shot a letter to the Wine Traders Association for cartelization and alleged stopping of liquor supply to restaurants and hotels.

This is reflected in a letter dated Oct 22, 2020 (HRAWI) complaining about it to stated, Wine Traders Association.

Since the Maharashtra government allowed restaurants and dine in hotels to open from October 5, 2020 there have been multiple limitations.

This includes seating capacity in drink-serving hotels allowed at 33 percent. Dine-ins have opened after a seven-month lockdown but fears of getting infected with COVID have kept most customers at bay.

Also, there is a lot of unsold liquor inventory lying with hotels. This has left a possible credit payment which is overdue for some restaurants with the wine trader association. This is the ground of current conflicts.

Bringing out these limitations, HRAWI accuses wine association of "embargo of such nature by means of collective anti-competitive action/cartelization against our against Member Restaurants is insensitive, illegal.”

The letter reveals that distributors whose bills have been duly paid up to date are also insisting on the payment clearance of all other member distributors of Wine body to deliver further liquor supplies.

HRAWI has taken the stand that Wine traders body by no means can use a collective action and impose an embargo on the hotels and restaurants to recover monies from individual restaurant owners if any is due.  According to them, the wine traders association is exploiting the monopolistic position it enjoys on supplies in Maharashtra.

The hotels and restaurant lobby have blamed wine traders association for abuse of dominant position and anti-competitive practice on liquor supply by using collective action for individual overdues.

The payment line has had problems due to some old stockpile of supplies with restaurants before lockdown.

A copy of HRWAI's letter has also been sent to Maharashtra Chief Minister Uddhav Thackeray, as well as Environment, Tourism & Protocol Minister Aditya Thackeray, and Principal Secretary, Civil Aviation & State Excise for the Government of Maharashtra Valsa Nair Singh.

The HRAWI is a 70-year Apex body of Hotels and Restaurants in Western India and the voice of the Hospitality Industry, representing all Hotels, Restaurants, Affiliates and Associates in the states of Maharashtra, Gujarat, Goa, Madhya Pradesh, Chhattisgarh and the UTs of Daman, Diu, Dadra & Nagar Haveli. HRAWI is the Western Region arm of the Federation of Hotels and Restaurants Associations of India, which is the apex body of the Hotel Industry.

What are distributors saying?

Wine Traders Association are only demanding the dues pending of February-March, 2020.

The Distributors association requires payment from restaurants and hotels to be made in 45 days, which is a standard credit time given to all in the F&B industry.

“Payments for February 2020 were due by March 20th, but restaurants were closed on March 20th, so payments for February and March are still unpaid and invoices are yet to be cleared. So, distributors want the hotel/restaurants to clear at least part of the dues before they start supplying,” one of the members of the wine traders association from Mumbai told Moneycontrol on condition of anonymity.

“The association is only saying that first at least pay 50 percent of the dues pending from Feb-March. For the next 50 percent they have been given timeline of 30-45 days,” the trader added.

Whether the wine association accedes to the demand to immediately cease the embargo or the spat continues, will be known in the coming times of this festival period.

Himadri Buch
first published: Oct 23, 2020 07:37 pm

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