UB halts beer supply to Telangana: What are the liquor laws in each state? Here’s a detailed guide

Each state in India has its specific policy, making it mandatory for importers, producers, and distributors to comply with local regulations.

United Breweries Ltd (UBL) on Wednesday announced that it has suspended beer supply to Telangana Beverages Corporation Ltd (TGBCL) with immediate effect. The company cited financial losses due to the non-revision of basic prices since 2019-20 and significant overdue payments from TGBCL for previous supplies.

UBL underscored its fiduciary duty to stakeholders and highlighted that selling beer at a loss is unsustainable.

The development has raised discussions over the liquor policy in India, which varies from state to state since alcohol is a subject in the State List under the Seventh Schedule of the Constitution. Thus, each state in India has its specific policy, making it mandatory for importers, producers, and distributors to comply with local regulations.

Here’s a state-wise look at the specific rules governing the import, export, and sale of liquor, including the necessary licenses, duties, and other legal requirements:

Andhra Pradesh: Liquor license holders in Andhra Pradesh are obligated to report their stock levels to the Excise Department, ensuring these quantities do not exceed the limits specified in the original license. Violations, including misrepresenting Indian Made Foreign Liquor (IMFL) as imported foreign liquor with counterfeit labels, will lead to serious penalties. In addition, any alterations to alcoholic beverages are forbidden, and offenders can face severe consequences, including imprisonment for up to two years or a fine of Rs 1,00,000, particularly if the modifications result in harm or death.

Arunachal Pradesh: Arunachal Pradesh has a strict control over the import and export of alcohol in the state, mandating approval from designated authorities, including army and para-military personnel. Alcohol may only be imported for legitimate purposes, such as scientific, medicinal, or industrial use. While individuals who legally purchase foreign liquor can privately sell it, altering the packaging of locally-produced alcohol and passing it off as foreign liquor is strictly prohibited.

Assam: In Assam, only individuals with a wholesaler license are authorised to import liquor. Upon receiving imported goods, licensees must wait for two days or until the Excise Department confirms that no further inspection is required before unpacking the items. Retailers in Assam are prohibited from stocking foreign liquor that the Excise Department has deemed unfit for sale.

Bihar: Bihar has enforced a complete ban on the sale and consumption of alcohol within the state since 2016.

Chhattisgarh: Chhattisgarh groups liquor shops in designated areas and issues a collective license for all shops within that area. Liquor outlets can stock quantities above the state's standard limits, but must pay the applicable tax on any excess stock. The state government also sets a minimum retail selling price for both country and foreign liquor. To import foreign liquor, vendors must pay the necessary import duties and obtain an FL1 license to sell it.

Delhi: In Delhi, alcohol manufacturers must register their brands and product labels with the Excise Department either directly or via a licensed vendor. Both domestic and foreign brands are required to have trademarks in India before they can be sold, though beer and wine are exempt from this requirement. Recent updates to Delhi's excise policy now allow the online sale of liquor. Additionally, individuals with a retail license cannot apply for a wholesale license and vice versa.

Gujarat: Until December 2023, Gujarat maintained a strict ban on alcohol. However, recent policy changes have eased these restrictions in some areas. Alcohol consumption is now permitted in restaurants located in the Gujarat International Finance Tec-City (GIFT City).

Goa: In June 2024, the Goa government amended the Goa Excise Duty Rules, 1964, allowing liquor shop licenses in areas within 100 meters of schools, colleges, and places of worship, which were previously restricted. These licenses will come at double the regular fees, including higher renewal fees. The Excise Commissioner can issue these licenses with prior government approval, relaxing Rule 90(4) that previously prohibited liquor shops in such areas.

Haryana: The Haryana government follows a lenient policy for alcohol sales in order to boost state revenue. The Excise Department supports retailers by helping them set up stores in high-traffic areas, with vendors required to pay the rent for these properties to the department. Additionally, all liquor labels must be pre-registered with the Excise Department. For foreign liquor, the importer or brand must submit a letter of authorisation along with the registration.

Himachal Pradesh: In September 2024, Himachal Pradesh became the first state to introduce a provision for property seizure in cases involving illegal and spurious liquor. This amendment to the Himachal Pradesh Excise Act of 2011, made during the monsoon session of the State Assembly, aims to intensify action against individuals engaged in unlawful activities related to alcohol.

Along with this, the state government implemented a revised excise policy that mandates the sale of liquor at a minimum support price (MSP). According to this policy, the maximum permissible additional charge over the listed price on the bottle is capped at 30 percent. For instance, if a bottle is priced at Rs 100, the sale price cannot exceed Rs 130, ensuring better regulation and affordability for consumers.

Jammu & Kashmir: In Jammu & Kashmir, bar owners can acquire licenses through a bidding process, with the option to bid for multiple outlets by paying the required fee for each. Bars are need to offer digital payment options and provide invoices to customers on request; failure to comply results in a fine of Rs 5,000 per incident. The state has also been promoting the consumption of low-alcohol beverages by offering the JKEL 2A License to vendors selling beers and ready-to-drink (RTD) alcoholic beverages.

Jharkhand: In Jharkhand, alcohol labels must adhere to specific guidelines under Section 3A of the Jharkhand Excise (Label Registration/Renewal & Fixation of Price of Liquor) Rules, 2014. These labels must include critical information such as the type of liquor, brand name, manufacturing country, production unit address, manufacturing and expiry dates, among others.

Karnataka: In Karnataka, individuals or businesses seeking to sell alcohol must apply for a liquor permit, which requires details such as the permit holder's name, type and quantity of alcohol permitted, validity period, and the delivery location. Vendors are allowed to stock only the approved amount of alcohol, with excess stock needing to be stored in a rented warehouse.

Kerala: Kerala follows a more streamlined process for restaurants in tourist zones to acquire liquor licenses and serve wine and beer. The state government is also focusing on promoting toddy, a traditional alcoholic beverage made from coconut flowers, by revamping toddy shops and encouraging the sale of toddy as a natural product. Additionally, three-star and higher hotels can now serve alcohol and produce toddy from nearby coconut trees. International brands wishing to sell their liquors or wines must apply through the Kerala Government e-Tender Portal or via an approved vendor, with evaluation by the Corporation’s Board of Directors.

Madhya Pradesh: Madhya Pradesh distinguishes between licenses for foreign liquor and locally made liquor. The state has imposed measures to curb alcohol consumption, including a ban on new liquor shops since 2010. The Excise Department is also closing outlets within a 100-meter radius of ladies’ hostels, educational institutions, and religious sites.

Maharashtra: Under the Bombay Prohibition Act of 1949, individuals in Maharashtra require a permit to purchase and consume both foreign and country liquor, with the minimum legal drinking age set at 25. Sellers must verify the buyer's age before making a sale. This is higher than the drinking age in most other states, which is typically 21.

Manipur: In 2022, Manipur lifted its 30-year liquor ban, allowing alcohol sales at designated locations like district headquarters and hotels with more than 20 rooms. The new law also allows the export of country liquor, signalling a shift toward regulated alcohol consumption in the state.

Mizoram: Mizoram was declared a dry state in 2019, but the state later amended it, permitting the sale of locally-produced wines manufactured from grapes grown within the state.

Meghalaya: In Meghalaya, businesses and individuals are required to pay duties to import, export, or sell liquor. The government increased the excise duty by 15 percent in 2023, reflecting an adjustment in the state's alcohol-related policies.

Nagaland: Nagaland has enforced a strict prohibition on the import, possession, export, and sale of liquor since the enactment of the Nagaland Liquor Total Prohibition (NLTP) Act, 1989, maintaining its dry status.

Odisha: Odisha issues liquor licenses based on the category of the alcoholic beverage, such as Indian Made Foreign Liquor (IMFL), foreign liquor, or country liquor. The state distinguishes between on-trade and off-trade licenses. In areas with a higher influx of tourists, the alcohol permit fee is reduced by half for hotels under the Odisha Tourism Development Corporation or India Tourism Development Corporation. Additionally, alcohol can be served at beach shacks to support tourism.

Punjab: In Punjab, individuals can bid for a liquor license provided they have filed income tax returns consecutively for the past three years. To prevent monopolies, applicants for a retail license are prohibited from applying for a wholesaler license. Liquor retailers must close by midnight, although those within 50 meters of a railway station can apply for extended hours by paying an additional fee.

Rajasthan: In Rajasthan, a liquor license is generally required for importing alcohol, but the military can import rum without a license, as long as they pay the applicable taxes. The Excise Department reserves the right to inspect imported goods. The state issues on- or off-trade licenses and specific permits for hotels, clubs, and canteens. An occasional license can be granted to businesses intending to sell alcohol for less than 30 days.

Sikkim: In Sikkim, alcohol importation requires a government pass, and the Excise Department must be notified every time stock is delivered for inspection. Retailers can only sell within approved locations, and there are restrictions on the quantity of alcohol that can be sold per person, such as a maximum of 12 bottles of IMFL or five cases of beer.

Telangana: Telangana has fewer than 3,000 liquor outlets, and permits to operate these outlets were distributed through a lucky draw, with 130,000 applicants for the 2023 process. Successful applicants were granted permits in August 2023, allowing them to commence operations by December 2023 and continue until 2025.

Tamil Nadu: In Tamil Nadu, individuals holding a liquor license must ensure that their stock does not exceed the permitted limits and that all alcoholic beverages are kept in their original packaging. For a beverage to be legally sold or served, its packaging must feature the manufacturer's name, be securely sealed, and include either a cork, a capsule, or be covered with metallic foil. Domestic liquors must indicate their place of manufacture in India, while imported liquors should display both the place and date of manufacture.

Uttarakhand: Uttarakhand recently updated its excise policies to generate more revenue through the alcohol industry, similar to Haryana’s approach. Additionally, the state aims to support local farmers by promoting the use of Himalayan botanicals and resources in alcohol production.

West Bengal: In West Bengal, individuals must pass duty taxes and acquire permits if they wish to bring more than one bottle of liquor into the state. However, unlike vendors who are required to have a license to sell liquor, private individuals who legally acquire foreign liquor can sell it without the need for a license.