Time to Cheer - Delhi's Restaurants, Hotels Allowed to Serve Liquor

It's finally time for the Indian F&B industry to say "Cheers" as Delhi's Dy Chief Minister instructs the excise department to allow restaurants and hotels to serve liquor on August 20th, 2020. This comes as a great relief after months of regulations prohibiting alcohol to be served at bars, hotels, pubs, and restaurants to contain the spread of COVID-19.

Delhi government's decision to serve liquor is good news

This move is the bearer of good news for the hospitality industry in Delhi but across India, as other state governments are likely to take a cue from the Delhi government. Moreover, the Indian central government may also decide to allow the reopening of bars and microbreweries in Unlockdown 3 from September 1st, 2020.

The Delhi government's decision to start serving of liquor is also dictated by the severe drop in state government revenues. Liquor generates a big chunk of revenues for the state excise department. Other states are under severe pressure to generate revenues and are likely to follow the Delhi example.

serving liquor is important for both consumers and the hospitality industry

Consumption of liquor is an important component of the dining out experience for consumers. It is very important too for restaurateurs as it balances out expenses and contributes to profitability. The economics and viability of the industry depends on the amount of liquor consumption.As Prakul Kumar, secretary-general of National Restaurant Association of India (NRAI), said: “Just food is not enough; liquor is an important ingredient in the overall dining-out experience.”

Restaurants have been allowed to reopen since June 2020 but serving of liquor was prohibited. As a result, most restaurant owners who had a liquor licence decided against reopening as they were likely to run up losses without the sale of liquor.

high sero positivity rates - more good news?

The recent antibody testing by Thyrocare of over 200,000 samples is probably the harbinger of more good news for Indians and the Indian hospitality sector. With one in four Indians testing positive for antibodies, the study indicates that India is much closer to achieving herd immunity. Moreover, the recovery rates at 74% are very encouraging and even the death rate has plunged to 1.9%. 

This is good news for the Indian F&B industry as this could lead to the removal of stringent regulations and the industry could get a boost earlier than anticipated. Consumers might start flocking back to eateries sooner than expected.

Is it time to rejoice for the indian hospitality industry?

The Delhi government's decision to serve liquor at restaurants and hotels is one of the best news for the hospitality industry since the pandemic struck. However, the decision has yet to be approved by Delhi's Lieutenant Governor before the state government can issue the order. Moreover, bars will remain closed until further notice.

But this is one very bright, promising step for the restaurant owners, F&B employees (over 5 million) and the entire ecosystem.

I, for one, am ready to pop the champagne and drink to the health of the Indian hospitality sector.