Liquor syndicates target new license holders to take over wine shops in Karimnagar

Liquor syndicates in Karimnagar are offering crores to newcomers who secured wine shop licences in the recent draw. Many first-time allottees, deterred by high operational costs, are selling or entering partnerships, enabling syndicates to take over multiple high-sales outlets

Karimnagar: Liquor syndicates are targeting newcomers who secured wine shop licences in the recent draw of lots, luring them with large sums and taking over their outlets. Syndicates are said to be paying more than Rs 1 crore for shops, depending on location and sales potential.

Besides habitual liquor traders, many individuals and groups applied for licences this year to try their luck, and a considerable number of first-time applicants secured shops in the October 27 draw. In Karimnagar alone, newcomers obtained 40 of the 94 shops allotted. Notably, three members of one family from Malkapur received three shops.

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Depending on the shop category, owners are required to pay an annual Retail Shop Excise Tax ranging from Rs 50 lakh to Rs 1.1 crore.

With the high costs of running liquor outlets, including procurement, rents, salaries and maintenance, many first-time licensees are hesitant to take up operations. Lacking experience, several newcomers are considering stepping back from the business.

Syndicates are capitalising on this hesitation, either purchasing shops by offering substantial amounts to original allottees or entering into partnerships after paying a negotiated sum. They are also targeting high-sales shops and buying them outright.

A wine shop in the Karimnagar rural area allotted to new licence holders was purchased by a syndicate for Rs 1.20 crore, according to sources. Another shop in Karimnagar town was taken over for Rs 1.10 crore. In a separate instance, a syndicate secured partnership in a shop by paying Rs 50 lakh.