I. Introduction
The Supreme Court’s ban on the sale of alcohol within 500 meters of state and national highways in 2016 caused a significant crunch in the physical retail space available to alcohol vendors in India.[1] Players in the alcohol industry thus began to look to e-commerce as an opportunity for growth. In particular, the delivery of alcohol through online platforms has been gaining popularity across India. Although regulators in India appear to be wary of such services, some states have been attempting to allow the online sale and delivery of alcohol.[2]
This post provides a brief overview of the regulatory landscape for this sector and a timeline of the developments in this space to give a sense of how regulators have reacted to the delivery of alcohol in India.
II. Regulatory landscape
The production, manufacture, possession, transport, purchase and sale of intoxicating liquors, and the excise duties levied on alcohol are state subjects, i.e., the state legislatures are empowered to legislate on these matters since they are contained in the State List (List II) of the Seventh Schedule of the Constitution of India.[3]
The executive power of the central government is co-extensive with the legislative power of the Parliament.[4] Similarly, the executive power of the state government extends to all matters with respect to which the state legislature can make laws.[5] In most Indian states, the state excise departments regulate the manufacture and sale of alcohol. These departments deal with the licensing of alcohol vendors and collection of revenue arising from the sale of alcohol.[6]
III. Timeline of developments
July 24, 2013: Letsbuydrink.com, which dubbed itself “India’s first online beverage club” began its operations in New Delhi and Mumbai to facilitate the sale and delivery of alcohol online.[7]
August 1, 2013: Letsbuydrink.com branches out to Kolkata. LivingLiquidz, a business with a similar delivery model, proposes launching operations in Kolkata as well.[8]
November 25, 2013: Three students of the International Institute of Information Technology-Hyderabad develop www.thebootlegger.co, to facilitate the online sale and delivery of alcohol in Hyderabad.[9]
June 28, 2014: The Maharashtra excise department raids the Mumbai-based outlets of Letsbuydrink.com on the basis of Section 24 of the Bombay Prohibition Act, 1949, which prohibits the online advertisement of liquor.[10]
September 8, 2014: Post the launch of Letsbuydrink.com, more websites started to explore this previously untapped use of the internet to sell alcoholic beverages. Madhuloka in Bangalore, wineBazaar.in, and hopscorkenbottle.com in Mumbai and boozzr.com in Delhi began to offer similar services. [11]
October 7, 2015: A senior government official reportedly informed the Press Information Bureau that the online sale of liquor was prohibited under the Delhi Excise Act, 2009.[12]
April 15, 2016: The Chandigarh crime branch cracked down on Gettalli.com, a website which listed numerous varieties of alcohol along with different offerings of snacks. As per the Crime Branch, the accused had caused significant revenue loss to the excise department by creating an online platform for the sale of alcoholic beverages.[13]
June 25, 2018: United Spirits, the Indian subsidiary of British alcohol major Diageo, announced that it would acquire a 26% stake in liquor-delivery start-up, HipBar for INR 27 crore.[14]
August 12, 2018: The Maharashtra excise department cracked down on an “alcohol-on-call” service provider that procured liquor from shops and bars and made deliveries to customers in Mumbai, Navi Mumbai, Thane, and Raigad. Subsequently, the excise department cancelled the licenses of 50 shops and bars for being part of the network.[15]
August 13, 2018: The Maharashtra excise department stated their intent to reach out to internet and phone service providers to monitor their clients and to check if anyone was indulging in illegal online or on-call alcohol delivery. Sources stated that a similar request had been made to the cyber police to help track such offenders.[16]
August 22, 2018: Google-backed task management app, Dunzo, stopped delivering alcoholic beverages in Bengaluru, Gurugram and Pune owing to concerns raised by the state excise authorities.[17]
October 15, 2018: Maharashtra’s excise minister, Mr. Chandrashekhar Bawankule announced that the state government of Maharashtra was considering allowing the online sale and home delivery of liquor in the state, to “curb instances of drunken driving”.[18]
October 16, 2018: Maharashtra’s Chief Minister, Mr. Devendra Fadnavis clarified that there was no decision to allow the online sale/delivery of alcohol. [19]
October 20, 2018: The government of Karnataka is considering framing a law to enable the online sale and home-delivery of liquor in the state. Officials from the excise department, who have mooted the proposal, believe that this move will help in boosting the excise revenue and curb cases of drunk driving.[20]
[This post has been authored by Srishti Ghoshal, a final year law student of Hidayatullah National Law University, Raipur, and Anmol Malhotra, a fourth year law student of Rajiv Gandhi National University of Law, Punjab. Nehaa Chaudhari, Policy Lead and Tuhina Joshi, Associate, Ikigai Law, gave inputs.]
[1] Malviya S. (2010, April). E-commerce an opportunity for alcohol industry: Anand Kripalu, MD, United Spirits, Economic Times, Retrieved October 28, 2018, from https://economictimes.indiatimes.com/industry/cons-products/liquor/ecommerce-an-opportunity-for-alcohol-industry-anand-kripalu-md-united-spirits/articleshow/63889028.cms.
[2] K.A. Martin (2018, August). Just click to clink: Kerala takes liquor sales online, The Hindu, Retrieved October 28, 2018, from https://www.thehindu.com/news/national/kerala/Just-click-to-clink-Kerala-takes-liquor-sales-online/article14578577.ece.
[3] Article 246(3), Constitution of India, 1949 read with entries 8 and 51 of the State List (List II) contained in the Seventh Schedule.
[4] Article 73, Constitution of India, 1949.
[5] Article 162, Constitution of India, 1949.
[6] K.P.M. Basheer (2013, December). The alcohol economy, The Hindu Business Line, Retrieved October 28, 2018, from https://www.thehindubusinessline.com/economy/the-alcohol-economy/article20697419.ece1.
[7] IANS. (2013, July 24). Let’s buy drinks – online!. Retrieved October 28, 2018, from https://www.business-standard.com/article/news-ians/let-s-buy-drinks-online-113072400960_1.html
[8] Ghosal S. (2013, August 1). Buying booze online? Kolkata says click hic hurray!. Retrieved October 28, 2018, from https://timesofindia.indiatimes.com/city/kolkata/Buying-booze-online-Kolkata-says-click-hic-hurray/articleshow/21520370.cms
[9] Kanth K. (2013, November 25). Push a button, get alcohol delivered at your doorstep. Retrieved October 28, 2018, from https://www.business-standard.com/article/companies/push-a-button-get-alcohol-delivered-at-your-doorstep-113112500444_1.html
[10] Ketan R. and Neha L.M. (2014, June 28). Online Liquor Stores Busted In Mumbai; Rs 1,80,000 Booty Recovered. Retrieved October 28, 2018, from https://www.mid-day.com/articles/online-liquor-stores-busted-in-mumbai-rs-180000-booty-recovered/15409170.
[11] Mitra S. (2014, September 2014). Click for a hic: Order your liquor online. Retrieved October 28, 2018, from https://www.business-standard.com/article/companies/click-for-a-hic-order-your-liquor-online-114090600537_1.html
[12] Press Trust of India. (October 7, 2015). Delhi Government Set to Crackdown on Online Sites Selling Liquor. Retrieved October 28, 2018, from https://www.ndtv.com/delhi-news/delhi-government-set-to-crackdown-on-online-sites-selling-liquor-1229419
[13] HT Correspondent. (2016, April 15). When online liquor sale ‘start-up’ delivered to cops, and got arrested. Retrieved October 28, 2018, from https://www.hindustantimes.com/punjab/how-to-sell-liquor-online-and-get-arrested-get-talli-lesson-chandigarh/story-LYRz9tEfbSnmw2VIj2D0VJ.html
[14] Tandon, S. (2018, June 29). Alcohol e-commerce takes a step forward with United Spirits’ investment in a liquor-delivery start-up. Retrieved October 22, 2018, from https://scroll.in/article/884333/alcohol-e-commerce-takes-a-step-forward-with-united-spirits-investment-in-a-liquor-delivery-startup
Kiely, M. (2018, June 26). United Spirits invests $4m in India’s first alcohol delivery app. Retrieved October 22, 2018, from https://www.thespiritsbusiness.com/2018/06/united-spirits-invests-4m-in-indias-first-alcohol-delivery-app/
[15] Tembhekar C. (2018, August 2). ‘Booze-on-call’ busted, 50 shops lose licence. Retrieved October 28, 2018, from https://timesofindia.indiatimes.com/city/mumbai/booze-on-call-busted-50-shops-lose-licence/articleshow/65370844.cms
[16] Tembhekar C. (2018, August 13). Excise department trains lens on those calling in for liquor. Retrieved October 28, 2018, from https://timesofindia.indiatimes.com/city/mumbai/excise-dept-trains-lens-on-those-calling-in-for-liquor/articleshow/65379663.cms
[17] Vardhan J. (2018, August 22). Exclusive: dunzo pauses alcohol delivery due to compliance, launches bike taxi in Gurugram. Retrieved October 28, 2018, from https://entrackr.com/2018/08/exclusive-dunzo-pauses-alcohol-delivery/
[18] Press Trust of India. (2018, October 15). Maharashtra Minister Says Online Liquor Sale To Be Allowed, Backtracks. Retrieved October 28, 2018, from https://www.ndtv.com/india-news/chandrashekhar-bawankule-maharashtra-minister-says-online-liquor-sale-to-be-allowed-backtracks-1932060
[19] Marpakwar P. (2018, October 15). Maharashtra CM says no plan to allow liquor home delivery. Retrieved October 28, 2018, from https://timesofindia.indiatimes.com/city/mumbai/day-after-maha-cm-says-no-plan-to-allow-liquor-home-delivery/articleshow/66209385.cms
[20] Aiyappa M. (October 20, 2018). Karnataka mulls framing law to sell liquor online. Retrieved October 28, 2018, from http://www.thehansindia.com/posts/index/National/2018-10-20/Bangalore-government-thinking-of-framing-a-law-for-online-sale-and-home-delivery-for-liquor-/428090
