Hotel industry in limbo after status quo on vend allotment

After status quo ordered by the Punjab and Haryana High Court on the vend allotment under the new Excise Policy 2025-56, local hoteliers are awaiting a final decision on the matter to accordingly update stocks, prices and extend liquor licence.

In the wake of the High Court order, the existing liquor vends allotted under the previous Excise Policy will not operate beyond March 31, while the allocation of new ones through the tendering process will not be given effect to till April 3, which is the next date of hearing in the case.

The annual licences at these hotels expire by March 31. Since the matter regarding the new excise policy, which restricts hotels from buying liquor directly from companies and rules in favour of purchasing stocks from vendors, is sub judice, the hoteliers are awaiting clarity. “For seamless operations in the new financial year, it’s requested that all embargoes be addressed and resolved at the earliest,” said Ankit Gupta, president, Chandigarh Hospitality Association and vice-president of Hotel and Restaurant Association of Northern India.

The annual licence ranges from Rs 15 lakh, Rs 21 lakh and Rs 27 lakh on the basis of hotel categories. “As the licences will expire on March 31, the department should follow the same rule as it adopted during the Covid pandemic for the extension of licence, till everything becomes clear,” said a hotelier.

He said, “The hotels have a good stock for the coming days, but if the hearing of the court case gets extended, there will be complications. The administrative officials should clear their stance on this issue, so those in business can keep extra stocks to avoid losses.”

The issue at hand

Recently, the Punjab and Haryana High Court ordered status quo on three petitions challenging the tendering process for liquor vends. The Bench of Justice Sureshwar Thakur and Justice Vikas Suri took on record an assurance by the counsel for the petitioner-existing contractors that they would not operate liquor business at their vends beyond March 31.

The Bench orally observed that the allocation of even 10 vends to a single entity was against the provisions of the Competition Act, which is aimed at preventing practices that harm competition, promoting fair trade and protecting consumer interests. The observations followed submission that a single family, their associates or directors of their firms had secured 87 vends, out of a total of 97 units.

The Chandigarh liquor vends tendering process for 2025-26 came under judicial scrutiny after the contractors’ alleged cartelisation and non-compliance with the Excise Policy. One of the petitions contended that the tendering results revealed that more than 87 vends, out of a total of 97 units, had been allocated to just two or three individuals operating under different firms or through their relatives, associates and employees.