Online Alcohol Delivery in India: Did Zomato and Swiggy get the approval to Deliver Alcohol?

With the coronavirus crisis drying up the state coffers, the opening of the Alcohol shops was the only way to make quick and easy money for the government. The national capital usually makes Rs 3,500 crore per month from liquor sales, but due to the lock-down, Karnataka made a record in a day of Rs 197 crore. Hence, the online-delivery of alcohol in India was looked at as an opportunity to boost the economy.

Alcohol consumption in India reached 6.5 billion liters in 2020. The steady increase in consuming these beverages can be attributed to multiple factors including the rising levels of disposable income and a growing urban population among others. This was seen as an opportunity by food delivery startups-Zomato and Swiggy for making alcohol available for home delivery.

No wonder when India witnessed liquor sales worth crores of rupees on the first day of the shops reopening since the nationwide lock-down came into force on 25 March, it also saw social distancing rules being flouted with people lining up till kilometers outside the shops.

“By enabling home delivery of alcohol in a safe and responsible manner, we can generate additional business for retail outlets while solving the problem of overcrowding,”

Anuj Rathi, vice-president – products at Swiggy, said in a statement. Credits to the huge demand for alcohol in India the government approved of the idea and on the 4th of June, Swiggy launched home delivery of Alcohol in West Bengal, soon after in Jharkhand and Orissa.

Now, to piece together the back-story of e-delivery of liquor and wine in India, there is some question that needs to be answered, such as, is this online delivery of alcohol legal and how is it managed. Well, we have answers to all your question.

Who Regulates the Liquor Business in India?
States that allowed Home Delivery of Alcohol in India
Reasons for the approval for E-Delivery of Liquor
Managing E-Delivery of Alcohol
Pricing of Alcohol
Swiggy and Zomato work with the Retailers

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Who Regulates the Liquor Business in India?

As huge demand for alcohol in covid lockdown, and social restrictions, online wine shopping in india became need of the time.

But, First of all, The question is How and by Whom is the Liquor Business in India Regulated?

India's alcohol drinks market was worth almost $27.2 billion in 2018, according to the most recent figures from the London-based research group IWSR Drinks Market Analysis.

Liquor is a matter of the state and its business is firmly regulated by the Excise department of each state and the government regulates the supply of liquor in a state. In some states, retail sales are done by government-owned shops and for other states, the government is just a bulk supplier and the retail is managed by licensed private bodies. For some states, alcohol sales are divided between their own and private outlets.

States that allowed Home Delivery of Alcohol in India

Thanks to the massive demand for alcohol in India even during a global pandemic, several states have allowed the online delivery of alcohol just to push the people back inside their houses. Zomato and Swiggy have already launched e-delivery of alcohol in Jharkhand and Orissa and are going to deliver in West Bengal shortly, whereas Delhi is on their radar too.

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Reasons for the approval for E-Delivery of Liquor

What was the reason behind the approval for E-Delivery of Liquor during a Global Pandemic?

There are several legal formalities to be looked at by the state government for the online delivery of alcohol. But the states swung into action when on the 8th of May the Supreme court observed that the states should find ways for online delivery of alcohol because of concerns over social distancing due to COVID-19.

The state government suggested multiple reasons for the approval of online delivery of liquor, for example, the Orissa government expressed its concerns over the long queues outside the liquor shops also informing that there was a great demand for it among the people.

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Managing E-Delivery of Alcohol

How will these Companies manage the E-Delivery of Alcohol?

To ensure the safe delivery of alcohol with the compliance of all the laws, Swiggy has come up with measures such as age verification and user authentication before accepting the orders. Customers can provide the required data followed by their selfie which the platform will use for verification using an AI-powered system. The delivery persons will have to carry an identity card with them for validation and their details must be submitted with the state government and the customer’s age verification is a must at the time of the delivery.

All orders will carry a unique OTP which would be required to provide by the customer at the time of delivery. There will also be curbs on the order quantity to ensure that customers are not bulk-purchasing.

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Pricing of Alcohol

How are these Platforms going to Price the Alcohol?

To prevent overcharging, the Orissa government is maintaining a list of retailers with the maximum price f different brands of alcohol. The delivery charges would be fixed at Rs.100 on orders worth Rs.1000 and for amounts beyond that, for every Rs.500 the charges will increase by Rs.25 having a maximum limit of Rs.300 on delivery. This process will be similar for other states as well.

Swiggy and Zomato work with the Retailers

How are Swiggy and Zomato going to work with the Retailers In-spite of their Tech Adroitness?

The biggest challenge in front of these food delivery startups would surely be the different set of rules of different states. All the states in India have different retail rules, different taxes, prices, and different age limits for the consumption of alcohol varying between 18-25 years.

Where, a month ago, Indians were browsing on the internet as ‘how to make alcohol at home’, the last few weeks have been the fuel of the locked-down economy’s engine has kept everyone in India going.

"Alcohol is necessary for a man so that he can have a good opinion of himself, undisturbed be the facts."

Finley Peter Dunne had once said. The Coronavirus crisis must have been an end for several small businesses, but has also appeared as an opportunity for various other business. E-delivery of liquor is one such massive opportunity that will open new dimensions and will earn enormous revenues.