Starting from April 1, Madhya Pradesh will introduce a new category of "Low Alcoholic Beverage Bars," as part of its updated Excise Policy. A first of its kind, these bars will serve only beer, wine, and ready-to-drink alcoholic beverages with an alcohol content not exceeding 10% volume on volume (V/V). Importantly, the consumption of spirits, such as whisky, rum, or vodka, will not be allowed at these establishments. This move comes alongside the state’s decision to restrict liquor sales in 19 locations, including 17 holy cities, under the new policy.
The introduction of these new bars is expected to expand the state’s existing alcohol outlet infrastructure. Currently, 460 to 470 liquor-cum-beer bars exist across MP. The overall number of bars will shoot up with these new set of outlets, an excise department official told PTI.
Meanwhile, the new policy also outlines a ban on liquor sales in 19 specific locations, including major religious sites such as Ujjain, Omkareshwar, Maheshwar, Mandleshwar, Orchha, Maihar, Chitrakoot, Datia, Amarkantak, and Salkanpur. This means that the alcohol shops, which sell both Indian Made Foreign Liquor (IMFL) and country liquor, will close down in these areas starting April 1.
The decision to restrict liquor sales in these areas, announced by Chief Minister Mohan Yadav on January 23, is part of the state's broader strategy to regulate alcohol consumption, especially in regions with religious significance. Despite the closure of these outlets, individuals will not face penalties for possessing or consuming liquor from outside the restricted areas, as prohibition laws are not yet in place in Madhya Pradesh.
The new excise policy will have financial implications, with the state expected to lose about Rs 450 crore in excise revenue due to the closure of alcohol outlets in these 19 locations. However, officials clarified that there will be no prohibition on carrying and consuming alcohol privately in these areas, as the law primarily restricts public consumption in bars and licensed establishments.
In addition to these changes, the state government has announced a 20% increase in liquor shop renewal fees under the new excise policy, effective from the next fiscal year. However, the policy related to heritage liquor and wine production will remain unchanged. Heritage liquor producers will continue to be exempt from Value Added Tax (VAT), providing them with a continued incentive to produce and sell traditional beverages.
As part of the government’s broader agricultural strategy, the state’s Grape Processing Policy will also be expanded to promote fruit processing and horticulture, which is expected to boost farmers' income. In particular, wine production from fruits like grapes and jamun, as well as from honey produced in the state, will be supported. Additionally, wine production units will now be permitted to operate retail outlets on their premises, allowing tourists to visit and taste wines at designated wine-tasting facilities.
The state will also allow foreign liquor bottling units to operate in Madhya Pradesh. These units will have the ability to manufacture, store, export, import, and sell specialty liquors. The state anticipates that the approximately 3,600 composite liquor shops across Madhya Pradesh will generate an estimated Rs 15,200 crore in revenue for the fiscal year.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
