When Shailja Singh headed to her favorite bar for a post-work beer this week, she found it shut, victim of an Indian Supreme Court ruling that has stopped the nation’s burgeoning alcohol and leisure industries in their tracks.
Thousands of liquor outlets were forced to close on April 1 after the order, which barred the sale of alcohol within 500m of a highway.
The ruling was meant to curb drunk driving on India’s roads, the world’s deadliest, but has also shut down many bars, restaurants and hotels that serve tourists and office workers such as Singh.
Photo: AFP
Fortunately for the 23-year-old, only half of the bar-and-restaurant-filled area in Gurgaon, a satellite city of New Delhi, is affected.
In a sign of the ruling’s arbitrary impact, bars that fall outside the 500m range are open, meaning she will not have to go far to get a drink.
However, for the businesses affected, the problem is not so easily solved.
“This is one of the most regressive steps that I’ve seen,” said one investor in a pub forced to go dry. “The prime minister is talking about improving the ease of doing business, but first tell us: Can we do business to begin with? What are we telling foreign investors — overnight your investments can go?”
India’s expanding middle class has made it a sparkling market for the alcohol industry.
Alcohol sales in India last year were worth US$40 billion, making it the eighth-largest market by value globally.
It is expected to grow by 6 percent on average annually for the next four years, according to a Euromonitor International estimate.
“The liquor players, the tourism industry, they all had a strategy in place when they set up their businesses and then this verdict came in,” an analyst at a Mumbai brokerage said, asking not be named. “This was completely unexpected and they will have to restrategize.”
Share prices of listed alcohol makers have already been hit.
United Spirits, which makes Black Label whiskey and Smirnoff vodka in India, saw its shares fall by about 9 percent on the Bombay Stock Exchange in the days immediately after the ban, despite a rising market.
Hotel and bar operators have also been affected.
Bar chain The Beer Cafe assistant brand manager Shahira Khan said business was struggling.
“Earlier on normal weekdays, we would get around 200 people each day. On weekends, around 250 people would walk in. Now we are hardly getting anyone,” she said. “After all, why would people come in? There is no beer at The Beer Cafe.”
India has the world’s deadliest roads with nearly 150,000 people killed in 2015, according to the Indian Ministry of Road Transport and Highways. Of those, 6,755 deaths were due to drunk driving.
The government has proposed more stringent sanctions for drunk drivers, including fines of 10,000 rupees (US$156) and a jail term.
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