Andhra Pradesh Announces New Excise Policy, Hands Over Retail Liquor Business to Private Dealers

Andhra Pradesh has introduced a new excise policy, shifting retail liquor sales from the government to private dealers. The policy, set to last two years, will allow 3,736 shops to operate, with 340 reserved for the toddy tapper community. An online lottery will determine the selection of dealers, who will be required to pay excise taxes based on location. The policy also introduces a low-cost liquor category priced at ₹99 or less and allows retailers to upgrade their outlets into model stores for an additional fee. The state expects to generate ₹5,500 crore annually from retail excise taxes.

The Andhra Pradesh government unveiled its new liquor policy for the next two years on Tuesday, shifting retail liquor sales back to private dealers. The move marks the end of the previous policy, under which the YSR Congress government operated liquor sales through the AP State Beverages Corporation for the past five years.

The new excise policy will come into effect on October 12, with the government continuing to manage liquor sales until then. Principal Secretary for Excise, Mukesh Kumar Meena, said the new policy, lasting for two years, aims to promote regulatory stability and encourage greater participation from private retailers.

The state government has allocated a total of 3,736 retail wine shops for the licensing period 2024-2026. Of these, 3,396 will be open to the public, while 340 shops are reserved for the toddy tapper community. A separate notification will be issued regarding the allocation of these reserved shops and premium stores.

The selection of dealers will occur through an online lottery at the district level on October 11, with applicants required to pay a non-refundable fee of ₹2 lakh. Successful dealers will be granted licenses, with excise taxes ranging from ₹50 lakh to ₹85 lakh depending on the area, payable in 12 instalments over the two-year period. The state expects to generate ₹5,500 crore annually from the retail excise tax.

Additionally, the government introduced a new category of low-cost liquor priced at ₹99 or less, aiming to provide affordable options while maintaining quality to curb the demand for illicit liquor. The policy encourages national suppliers to introduce well-known brands at this price point.

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The government is also allowing retailers to upgrade their outlets to "model stores" by paying an additional excise tax of ₹5 lakh. These model stores will be permitted to sell liquor-related accessories, including ice buckets, wine corkscrews, and glasses.