Share price of alcohol and brewery companies Radico Khaitan and United Breweries fell up to 6% in trade today after Arvind Kejriwal-led Delhi government imposed a 'special coronavirus fee' on sale of liquor by raising excise duty by 70%. Later, Andhra Pradesh government also raised excise duty on liquor sale by 70%.
United Breweries share price lost 6% to Rs 512 compared to the previous close of Rs 970 on BSE. The stock opened at Rs 984.90 day. It has lost 32% during last one year and fallen 26% since the beginning of this year.
United Breweries market cap fell to Rs 24,642 in afternoon trade. Similarly, stock of another liquor company Radico Khaitan fell 5.64% to Rs 298.75. Radico Khaitan share price has declined 15% in one year and fallen 2.52% since the beginning of this year.
Delhi: Long queue of people outside a liquor shop in Mayur Vihar Phase -1 area amid #CoronaLockdown. Delhi Government has imposed a "Special Corona Fee" of 70% tax on Maximum Retail Price (MRP) of the liquor. pic.twitter.com/vPsUwt40bx— ANI (@ANI) May 5, 2020
United Spirits stock too tumbled 4.49% to Rs 517.The stock has fallen after five days of consecutive gain. Total 4.74 lakh United Spirits shares changed hands amouting to turnover of Rs 25.05 crore on BSE.
In contrast, Sensex was trading 289 points higher at 32,005 and Nifty was up 78 points at 9,371.
On Monday, liquor stocks gained amid a falling market on the first day of opening of liquor shops amid the ongoing coronavirus lockdown. While GM Breweries shares gained 15.65 per cent to Rs 432.25, Radico Khaitan stock jumped 6.23 per cent to Rs 312.20. United Breweries surged 5.80 per cent to Rs 992.60. Globus Spirits share rose 4.98 per cent to Rs 97 and United Spirits too gained 1.49 per cent to Rs 544.50 on the BSE.
Andhra Pradesh Government hikes liquor prices by 50%, taking the total overall hike in price of liquor to 75%. The revised rates will come into effect from today afternoon. Price hike imposed to discourage alcohol consumption: Chief Minister's Office— ANI (@ANI) May 5, 2020
The decision to hike excise duty comes after social distancing norms were flouted across the country including the national capital when liquor shops opened on the first day of lockdown 3.0 yesterday.
In some areas, shops had to be closed before the permitted time due to huge crowd gathering to buy liquor. Modi government on Friday allowed liquor shops to resume operations with certain restrictions during the third phase of the lockdown, beginning May 4. They are allowed to open all across the country, excluding containment areas.
As per the government order, only standalone shops will be allowed to sell liquor; malls or liquor shops in shopping complexes will remain closed. According to market experts, breweries and distilleries will report volume decline in March quarter earnings report due to decline in alcohol consumption in India in wake of coronavirus-led nationwide lockdown.