Liquor stocks wilt as Bihar decides to go dry from 1 April
27 Nov 2015
Shares of major spirits companies, such as United Spirits and Radico Khaitan, fell following the announcement of Bihar going ahead with the ban on liquor sales from April 1 next year.
Share prices of liquor companies plunged as much as 10 per cent since the announcement.
At a function in Patna, Bihar chief minister Nitesh Kumar said Bihar will go dry from 1 April, making it the sixth state in India to ban the sale of liquor. This, he said, was in line with the promise he had made to voters during the recent elections in the state.
While the move will affect liquor companies' revenues at least marginally, the state's exchequer will be the bigger loser, taking an annual hit of Rs5,000 crore.
This was the first policy announcement made by Nitish Kumar after taking charge as the chief minister for a fresh term. Nitish had made a promise on prohibition in July in the middle of the assembly poll campaign. ''I will not step back from what I had said… and I will implement it. I had spoken from my heart. The new policy of prohibition would be implemented from the next financial year beginning April 1, 2016,'' Nitish said at a programme to mark Prohibition Day.
His move will go well with women voters who support the ban, but the state administration will have to face up to the challenge of implementing the ban, especially in containing growth in sales of spurious liquor.
In the past, several states have tried to impose prohibition only to repeal it later.
''We tried to impose this ban in 1977-78 as well but it was not effective. But as I had promised women of Bihar who made this complaint months ago, I think this ban was important,'' Kumar said while speaking at an event in Patna.
Kumar said he realizes that Bihar earns a healthy revenue from liquor but the ill effects of liquor on the poor are far greater.
''Ill effects of liquor are far greater than the revenue we earn from it. I will not back off from my decision,'' said Kumar.
But the decision found rare support from a key political rival. ''We will fully support total prohibition in Bihar. Country liquor as well as foreign liquor should be part of this ban,'' tweeted Sushil Kumar Modi, senior BJP leader who was deputy chief minister till Nitish snapped ties with the party in 2013.