Uncertainty looms over pub capital Bengaluru

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Bengaluru: This Saturday, when many in pub capital Bengaluru land up at their favourite watering holes, they will most likely find them dry.

Roughly 850 bars, clubs, restaurants and liquor shops in the city will be impacted by a Supreme Court ban on selling liquor near highways. With less than two days to go for the 30 June deadline and little clarity on what next, anxious pub owners crowded outside the state’s excise department office at Shanthi Nagar on Wednesday. The only contingency plan they have is to request the government to give them six months to relocate and not cancel their licences in the interim

Liquor licences in Karnataka, one of India’s top states in terms of alcohol consumption and sales, follow a July to June calendar. Notices directing establishments that fall within the court order to stop serving liquor and retail outlets to either relocate or close have already been issued by the excise department.

Key arterial roads in Bengaluru including those in the central business district (CBD) area like MG Road are classified as highways, affecting owners and patrons of restaurants, pubs, bars and other establishments in these areas.

“It doesn’t look like it will get sorted by 30 June. They have to immediately de-notify these roads – the state and central government. Then we can survive. Even today, we are trying to get more clarity. We went to the chief minister’s office. But we don’t know what will happen,” said Madhukar Shetty, secretary of Karnataka Hotels Association.

Church Street Social—part of a chain of such café bars run by Impresario Entertainment and Hospitality Pvt. Ltd on Church Street, adjacent to MG Road that has been declared a highway has received a notice to stop serving liquor, but the iconic Koshy’s restaurant that also falls under the apex court’s 500 metre limit from MG Road has not.

In April, when the hotels association checked with the National Highways Authority of India (NHAI), the Bruhat Bengaluru Mahanagara Pallike (BBMP), the Public Words Department (PWD) and the Bengaluru Development Authority (BDA), they were told key roads like MG Road and Brigade Road are not highways, said Shetty.

But they have now been informed by the excise department that these roads are indeed highways and establishments that fall within the Supreme Court’s 500-metre limit have been served notices, Shetty said. While there is not much the association can do, they have given the government three options to help them out—de-notify these roads, extend the limit by another 100 metres or, of course, give them time to relocate as per their contingency plan.

Even if they are allowed to relocate, not all will be able to. Shetty estimates that only 60% will be able to shift as it requires a huge amount of capital. The rest will probably shut down permanently, he estimates. Those like the Vivanta by Taj on MG Road with a tourism-related liquor licence cannot be shifted, Shetty added, since such licenses cannot be moved.

“Retailers will have to shift or close down units; there is no other way currently. They have to pay 50% of their renewal fee as shifting charges. Suppose the licence fee is Rs4 lakhs, then the retailer has to pay Rs2 lakh as shifting charges,” a senior official at the excise department said on condition of anonymity.

Fine dining restaurants will still manage to pull through, but pubs and bars will suffer the most as 90% of their business depends on liquor, according to industry executives and the hotels association. On the other hand, liquor firms do not expect either a big or a lasting impact, even though they, like hotel and bar owners, pointed out that the picture is really fuzzy even with just two days to go for licenses to run out.

“For the time being, there will be a knee-jerk reaction especially among the premium brands because they sell essentially to restaurants,” said Deepak Roy, executive vice-chairman of Allied Blenders and Distillers Pvt. Ltd that makes Officer’s Choice whisky.

Roy’s peers, single malt makers Amrut Distilleries Pvt. Ltd’s executive director Rakshit Jagdale and John Distilleries Pvt. Ltd’s chairman Paul P. John, both agreed, saying consumers and the market will settle down over time as people get used to travelling a little extra for a drink.