Monopoly Concerns Raised in Delhi's 2021-22 Excise Policy

The CAG report on Delhi's 2021-22 excise policy highlights risks of monopolistic practices, with a few wholesalers dominating the liquor supply chain. An exclusive arrangement between manufacturers and distributors limited market competition, with three distributors controlling over 71% of the liquor supply. The policy's design flaws raised concerns about monopolization.

In a critical report, the Comptroller and Auditor General (CAG) has highlighted significant issues in Delhi's 2021-22 excise policy, citing risks of monopolization due to exclusive arrangements between manufacturers and a limited number of wholesalers dominating the liquor supply chain.

According to the findings, three distributors alone controlled over 71% of the liquor supply in the city. This exclusive arrangement has sparked concerns, especially as it affects competition among the 367 registered IMFL brands, where only a handful account for the majority of sales.

The report, issued amid allegations of a liquor scam during the run-up to elections, underscores design flaws in the policy that could lead to cartel formation, emphasizing the need for reforms to ensure a fair and competitive market.