The border districts of several states see very high liquor sales with most of the alcohol illegally transported across the border at a higher rate
Photo Credit : PTI,
Supreme Court banned liquor sale within 500-metre of highway effective from 1st April. This order was implemented to reduce road accidents but it was will have adverse effects on the hospitality and FMCG sector affecting a million jobs.
Alcohol sales will be badly hit along with the roadside food and snacks will probably be affected. Highway property rates on prime locations will also plunge. Hospitality, FMCG and liquor manufacturers will see fall in growth and there are high chances of increase in corruption through the illegal sale. The industry will initially find it difficult to maintain their finances.
All these affected sectors will hit the GDP growth and employment loss will play out over a long period. The re-employment of the workplace will be a major problem. The cutting out of skilled and semi-skilled jobs in this fashion could have awful long-term consequences in terms of uneven development and reduced per capita income.
Growth rates in FMCG and in the liquor industry are difficult to estimate for several reasons. Alcohol has to face prohibitions in several states and follow different laws in the different state. The slashing of skilled and semi-skilled jobs in this fashion could have nasty long-term fallout in terms of uneven development and skewed per capita income ratios.
The border districts of several states see very high liquor sales with most of the alcohol illegally transported across the border at a higher rate. A similar model could arise with liquor sales being very high in the area just beyond the 500-meter mark.
FMCG is less affected by illegality and it doesn't face barriers much like banning. But, there is very stiff competition. The fact that a couple of major players are unlisted and allegations from big listed players that at least one major unlisted player derives higher margins by skimping on quality control. This has helped the unlisted player to grab market share. Growth in the listed companies has slowed. This move could place an additional burden on the hospitality sector.