New Delhi, Mar 4 (PTI) The Delhi government Friday told the Delhi High Court that promotion of responsible drinking and prevention of the illicit trade of liquor is the primary objective behind its order prohibiting any rebate or discount by liquor retailers and that it did not intend to make discounting a tool to encourage unhealthy competition and market distortions.
In its affidavit filed in response to a plea by several liquor licence holders against the prohibition, the city government said that while it initially allowed concessions for bringing healthy competition and promoting consumer choice, it was noticed that some people were buying liquor in bulk for hoarding or bootlegging and the discounts being offered were not in the public interest.
In February, some retailers “started giving huge discounts/offers on the MRP of liquor (‘buy one, get one and ‘buy one, get two’ etc)” and “banners and hoardings were put up by the licensees” to lure the customers with freebies which resulted in huge crowds gathering outside the liquor vends leading to adverse law and order situation, the Delhi government asserted.
“There was no intent on the part of the Government to make the discounting tool of encouraging unhealthy competition and distortions in the market, which was the situation that was developing during the recent round of discounting being offered by some of the licensees and hence was unsustainable and also not in the larger public interest,” said the affidavit filed by Assistant Commissioner, Department of Excise.
The government stated that the regulation of liquor trade is paramount due to the injurious impact on health as well as the adverse social impact and it cannot be privy to a sale behaviour which is contrary to the reforms introduced by it.
“The increase sales due to discounting cannot be logically attributed to only increase in consumption as the average sales during the discounting period is showing a significant spike and the chances of illicit hoarding, black marketing and interstate movement of liquor cannot be ruled out. The Government cannot be privy to such sale behaviour and which is contrary to the reforms brought by Delhi government wherein nominal duty has been levied on the import of liquor,” the affidavit said.
“The promotion of responsible drinking and also preventing the illicit trade of liquor is the primary objective of the Delhi Government… the ethical and social responsibility is paramount and consumers should not be lured to get into illicit and illegal liquor trafficking and hoarding liquor beyond the permissible limit under Rule 20. The social and ethical responsibility of the Government towards its citizens is as important as securing the Revenue earned from the liquor trade,” it added.
The Delhi government said that the challenge to the decision is “wholly misconceived” and should be dismissed.
On March 3, the Delhi government had told the high court that it can’t promote drunkenness through discounts that were given in a “sporadic manner” and were being misused by those with “big pockets” to create a monopoly.
The petitioners had urged the court to stay the decision on the ground that it was causing them an irreparable loss on account of the substantial decrease in their business.
The court had asked the Delhi government to file its response to the challenge by Friday evening. It was the petitioners’ grievance that even though the applicable excise policy and the tender expressly permit a grant of discounts by the retail licencees, the Delhi government on February 28 prohibited the discounts without allowing them to be heard.
On February 28, the Delhi excise commissioner had passed an order discontinuing any discount or rebate on the Maximum Retail Price (MRP) of liquor in the national capital.
The order referred to reports of large crowds at liquor stores as well as unhealthy market practices as the reason for the discontinuation of the discounts and said that the vendors are indulging in promotional activities which are prohibited under the Delhi Excise Act.
In the plea filed by Bhagwati Transformer Corporation and others, the liquor licence holders contended that the actions of the authorities are arbitrary, disproportionate, discriminatory, and violative of their fundamental rights under Article 14 of the Constitution. PTI ADS RKS RKS
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