A licensed liquor retailer, Shrestha says strict enforcement of the licensing regime will help create local liquor retail monopolies, enabling his own shop to bring in an unprecedented amount of revenue.
“Not many businesses operating in this locality will be able to afford a license,” said the 35-year-old, whose double-shutter shop is registered as a department store, allowing him the liberty to sell goods ranging from staples to ice cream, and baby bottles to Vat 69.
The license fee for retailing domestic liquor brands is set at Rs 6,000 in the municipalities and Rs 2,000 in Village Development Committee, while the fee for retailing foreign brands is set at Rs 8,000 for both. Hotels and restaurants that serve liquor wear a fee of Rs 3,000, while department stores have to pay Rs 10,000.
Shrestha says liquor is already the biggest revenue earner in his shop after staples. “Remember, that is the case even without the regulation in place,” he said.
The government directive says businesses will not be allowed to sell liquor and other goods from the same store. In order to sell both, a businessman will have to register separate businesses and set up separate shops for liquor retail and retail of other goods.
A businessman for nearly 20 years now, Shrestha said of approximately 40,000 retail stores throughout Kathmandu, over two-thirds of these are grocery stores, all of which sell liquor.
“Of these, not many would be willing to turn into exclusive liquor retails. And running two separate shops will be expensive,” he said.
No ceiling on licenses
Businessmen like Shrestha may not be the only ones to benefit financially from the arrangement.
The Inland Revenues Department enforcing the directives, expects government revenues from excise duty to go up from the existing Rs 10 to Rs 13 billion, owing largely to the regulation of liquor retail.
It’s perhaps due to revenue consideration that the directive, which says in its first paragraph that it intends to “end the widespread social evil”, is liberal on distributing licenses.
“There is no ceiling,” said Keshav Poudel, an officer at the excise section of the department. “We will distribute the licenses to all interested applicants,” he said.
There has already been a remarkable increase in the number of license holders since the budget announcement.
Kishan Singh Basnet, another officer at the section, said there were less than a hundred license holders for liquor retail in Kathmandu Valley in September when the budget announcement was made. “Now, there are already more than a thousand,” he said.
As of last Friday, 1155 businesses had acquired licenses to retail liquor in Kathmandu, 140 of which are based in Lalitpur and 110 based in Bhaktapur.
Age bar
The directive also says shopkeepers will not be allowed to sell liquor to those under 18 years of age. But there is no mechanism to enforce this.
“Right now, the focus is on licensing,” said Poudel. “We haven’t come up with a way to ensure that the underage do not purchase liquor.”
What will a storekeeper do if a 14-year-old asks for liquor?
“Give him,” said Shrestha. “How do I know for sure that he is a 14-year-old?”
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