Highway Liquor Ban

Highway Liquor Ban

On April 4th, 2017, The Supreme Court reaffirmed their earlier decision to ban liquor being sold along any national and state highways....

How will this affect the various shops and businesses in the liquor industry?

On April 4th, 2017, The Supreme Court reaffirmed their earlier decision to ban liquor being sold along any national and state highways. The initial ruling was passed on 15th December 2016 and was made official on the 31st of March.

Protests have been brewing in Kerala, Goa and Haryana; with those states losing an estimated 50,000 crores in revenue.

 The pubs, bars, hotels and restaurants along the highways in various states that serve liquor had sought to make a fine distinction between vending and serving liquor.

They had sought exemption from the SC order because such units are part of hospitality industry, and not the liquor industry.

What was the reasoning behind the ruling?

India has a high rate of road accidents and fatal road accidents among the highest in the world, with an accident occurring every four minutes, and 400 road deaths daily.

The court has quoted the ministry statistics: 1.46 lakh people were killed in 5.01 lakh road accidents, in 2015 alone. Of this, drunken driving accounted for 16,298 accidents and 6,755 deaths. This means drunken driving is a minor reason, causing 3.3% of total accidents and 4.6% of deaths reported.

Drunken driving related accidents and deaths have shown a remarkable drop while road accidents are on a steady rise. In 2012, drunken driving caused 4.9% of total accidents and 5.7% (or 7,835) deaths. With the amendment to the Motor Vehicles Act and higher penalties and strict punishment in place, such cases are likely to drop further.

How does this effect the industry?

The court has made no secondary measures to help support the large part of the liquor industry that will now be out of work.

The failure on the part of state governments in checking road accidents and the subsequent court-ordered shutdown of hotels and bars have dealt a heavy blow to the tourism and hospitality sectors in the country.

While it has rendered several lakhs of people jobless, shrinking exchequers is what state governments are more worried about. Several of them, including Maharashtra, Rajasthan, Madhya Pradesh and Uttar Pradesh, are now trying to dodge the court order by behind highways in cities.

Assessment

The Indian government must understand the effects of banning alcohol near highways and look to soothe the anger surrounding it. A lot of India is made up of highways and bar owners will likely avoid the law. Implementation will be hard and the lack of any progressive laws before the total ban should lead to its reconsideration.

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