Highway liquor ban: Losses estimated at over Rs 50,000 crore for hospitality industry

It was Friday evening, March 31, and hospitality entrepreneur Ajit Dhumal was at one of his outfits, the British Brewing Company (BBC), a gastro pub in the busy suburb of Andheri in Mumbai. The area is known for its IT companies and a young professional workforce. Dhumal’s WhatsApp messenger beeped. He was not prepared for the message to follow: Hotels and restaurants within 500 metres of highways will not be allowed to sell liquor.

“I hoped it was a rumour and misinterpretation... but by late evening, it was clear that it was true,” says Dhumal, a director at BBC. The news caught the entire hospitality and real estate industry off guard. The general belief was that this ban — announced through an order by the Supreme Court last week — was meant only for vendor shops and would not impact bars or restaurants.

According to industry experts Forbes India spoke to, the latest Supreme Court order — which follows a broader December 15, 2016 ruling — bans vending of liquor within 500 metres of highways. The ruling is aimed at reducing the incidence of drunk driving and road fatalities along the roadways. Following the December 2016 order, restaurants, hotels and pub owners had sought a clarification between vending and serving liquor. But as the situation stands, experts are still not clear if the distinction has been made.

Restaurant owners, especially those operating inside malls situated on city highways never thought they would come under the hammer.

“We are shocked by this [court] decision. First of all, neither in any of the allied cases which were made in Punjab and Haryana nor in Tamil Nadu was there ever a mention of bars and restaurants. It was only about liquor shops along the highways. The December 2016 order of the Supreme Court also only spoke about liquor shops. It never spoke about bars and restaurants,” says Riyaz Amlani, CEO of Impresario Entertainment & Hospitality and president of National Restaurant Association of India.

Read more.

Source: Forbes India