Want to open a liquor store? You need to have enough money in your pocket to be able to do business!
Opening a liquor shop is not as profitable as it sounds. Shop licenses are obtained through e-lottery or auction, and require a clean character, age, and necessary documents. An investment of at least ₹152 million, including license, setup, and initial stock, is required.
It's often seen that people consider the liquor business a profitable venture. The common belief is that once a liquor shop or "theka" is opened, money will flow in.
However, the reality is a bit different. Opening a liquor shop is no child's play, nor can it be achieved simply by throwing money around. It's a crown of thorns, requiring strict government requirements, legal complexities, and a substantial investment.
The way to the shop opens through the lottery system
First, let's dispel the myth that you'll go to an office, deposit money, and get the keys to the store. The government uses a highly transparent yet complex process for allocating liquor stores, called the "e-lottery" system.
The Excise Department invites applications for liquor store licenses every year. Interested individuals must first register on the department's official website. But wait, not everyone is eligible.
Applicants must be at least 21 years old. Furthermore, a clean character is mandatory. If you have a serious criminal record, you'll be eliminated. Furthermore, in some states, government liquor stores are allocated through auctions, meaning the highest bidder will receive the license.
You should have 15 to 20 lakh rupees in your pocket.
- To start this business, you'll need a significant amount of money. Expenses can be divided into two parts: government fees and setup costs.
- According to government data and regulations, license fees depend on the category of shop. If you want to open a retail shop selling only beer or liquor, you'll need to pay around ₹150,000 for the license.
- However, if you plan to open a 'permit room' (where people can sit and drink alcohol), this cost can increase to around ₹544,000. Application fees vary by district.
- The real expenses begin after obtaining the license. You need a suitable shop space (either your own or rented) that complies with the excise department's standards.
- Then there are electricity and water bills, employee salaries, and, most importantly, the initial stock of liquor. Stocking up requires a significant capital investment. Overall, if you're considering this business, expect a budget of at least 15 to 20 lakh rupees.
The real test begins now.
Even if you hit the jackpot and deposit the money, there's no time to breathe a sigh of relief. The liquor business operates under strict government supervision. Once you receive a license, you're handed a long list of rules.
The most stringent rule is age. Selling alcohol to anyone under 18 is a legal offense. If your shop is found to be doing so, it won't take long for your license to be revoked. Furthermore, the district administration determines the opening and closing times. You can't open the shop at will.
The government is also strict about pricing. You can't charge even a rupee more than the MRP. Shop licenses have often been suspended due to complaints of overpricing. Therefore, this business demands discipline.
If the renewal is not done then the shop will be closed.
Another important condition of a liquor license is that it's not lifelong. It's only valid for one fiscal year (one year). As the year nears its end, you'll need to go through the license renewal process.
If you don't pay the renewal fees or complete the paperwork on time, your business could be put on hold. You might have to go through the entire process of application and lottery again. Therefore, this is a business where you have to refresh your credentials and contract with the government every year.