UP introduces 'Franchise Fee' model in ambitious 2024-25 excise policy to woo global liquor brands

UP, with a population comparable to Germany, the United Kingdom, and France combined, has unveiled an excise policy for the fiscal year 2024-2025, featuring a unique 'franchise fee' model. The innovative approach aims to entice top global liquor brands into a fixed-fee franchise relationship, fostering collaborations with the state's distilleries for co-producing brands.

According to the state's excise commissioner, Senthil Pandian C, the objective is to showcase the best of foreign liquors being manufactured in Uttar Pradesh, offering consumers more variety while bolstering state revenue. The UP cabinet recently approved the excise policy, anticipating a revenue of ₹58,000 crore.

Under the 'franchise fee' model, if a brand gains popularity and exceeds distilleries' capacity, it can purchase foreign liquor and expand its bottling capacity for a year, contributing to increased revenue. Additionally, the government is providing relief to beer vendors by allowing on-site consumption, provided they have a 100-square-foot area adjacent to the shop.

The reduction in beer export fees and the introduction of "permit rooms" for immediate consumption aim to curb street hooliganism and promote responsible drinking. To maintain affordable prices for country-made liquor, the state has limited categories to four, emphasizing the promotion of grain-based country-made liquor, aligning with global demand trends.