With microbreweries and pubs specialising in craft beer, Bengaluru used to wear it’s unofficial tag ‘pub city of India’ with pride. But more than a year into the pandemic, and the situation remains bleak. The once thriving pubs are struggling with high rents, increasing cost of operations, and lack of business for four months during the lockdown in 2020 and three months this year.
A majority of the pubs in the city are yet to renew their excise licences. Karunakar Hegde, vice-president of the Federation of Wine Merchants’ Associations of Karnataka and secretary of Bengaluru Madya Vyaparigala Sangha, estimated that of the 500-odd pubs in the city, more than 300 were yet to renew their licences. “Though there are around 50 microbrewry licence holders, only around 30 are functioning,” he said.
The one concession made by the Excise Department was to extend the facility for proprietors to pay licence renewal fees in two instalments. “It was extended in 2020–21 and in the current fiscal (2021–22) as well. However, with months of no business, many licence holders were not even able to pay the first instalment, the deadline for which was June 30. The deadline for the second instalment is December-end,” said Mr. Hedge.
CL Line licence holders, including wine shops, bars, star hotels, hotels, with board/lodging facilities. The licence fee for CL-7 (board and lodging) is ₹10.8 lakh a year and for CL-9 (bars) it is ₹8.62 lakh. For bars and pubs to serve loose beer, they require an RVB licence, which is an additional ₹17,250 a year.
It’s the RVB licence holders such as pubs and microbreweries that are facing an uncertain future. Though the State government allowed bars and restaurants to operate at 50% capacity under Unlock 3.0 on July 5, it did not ease restrictions for RVB licence holders, which continue to remain closed. Last year, too, pubs were one of the first to be shut down ahead of the first wave of COVID-19.
Waiver sought
Given the difficulties faced by the industry, the federation had approached the State government seeking a waiver of at least 25% in the licence fees. However, there was no positive outcome to their demand.
Senior excise officials, on condition of anonymity, told The Hindu that as per the rules, there was no possibility for a partial waiver or discount on the licence fee. “All licence holders sign the terms and conditions that clearly state that there can be no waiver on the licence fee,” said an official, adding that the same had been submitted before the High Court of Karnataka when a few licence holders had approached the court in this regard.
Chethan Hegde, founder of the chain of pubs, 1522, said the lack of business had dealt a nasty blow to the food and beverage industry. “Most of the outlets are in prime properties. Despite not opening, we have to pay rents and salaries to the staff. Even after relaxations, many outlets are yet to open, as staff who had gone back to their respective home towns during the lockdown are yet to return,” he said.
On the other hand, local wine shops have witnessed good business this lockdown as takeaway services had been allowed, for a limited number of hours. Sources in the Excise Department said that during April to June 2020–21, the revenue collected was ₹3,831.17 crore, while it was ₹5,954.07 crore during the same period this fiscal (April to June 2021–22).