Come April 2017, no more Liquor shops on the highway!

[tsk1979]

Originally Posted by Samurai

Looks like all the states are solving their revenue problem by converting National Highways into district highways.

http://www.timesnow.tv/india/article...17%2F03%2F2017

No. Chandigarh is a special case. All roads of chandigarh are national highways because it is a union territory. Imagine if Brigade road, MG road, Koramangla 100 feet main etc., all were national highways.

This group is like the daily mail

[Samurai]

I don't know about other states, but Karnataka government heavily relies on liquor revenue, both officially and unofficially. Apart from the sales, the state charges few lakhs every year on license renewal, apart from the huge bribe to approve the renewal every year. Even the police depends heavily on their hafta from all bars and pubs.

This ban will destroy at least 80% of this business. So it makes me wonder, how is the state government going to make up for the shortfall of this huge revenue. Also, how will excise/police going to make up for their unofficial revenue. I am afraid, in both cases new targets will be picked. State will increase some other tax to fill the short fall, and the officials will target some other business to harass. Both are not going to take on austerity measures and try to live will lesser revenue.

Originally Posted by tsk1979

No. Chandigarh is a special case. All roads of chandigarh are national highways because it is a union territory.

I hear it is the same case in Assam, where all roads are state highways or above. That means all liquor sales must take place deep in some jungle, that is at least 500 meters from any road.

Even at other places, now bars/pubs will move into residential areas to get far enough from the highways. That is a new can of worm waiting to be opened. Enforcement is the only way to really reduce DUI, just moving the shops away will not do it.

[binand]

Originally Posted by Samurai

I don't know about other states, but Karnataka government heavily relies on liquor revenue. [snip] So it makes me wonder, how is the state government going to make up for the shortfall of this huge revenue.

This was the case in Kerala too. After Oommen Chandy refused to renew the licenses few years back, the state's excise revenue dropped massively. But looking at the most recent budget this revenue has picked up though not to the levels where it could have been, based on the trend. But the key point is that the state's overall revenue receipts is not affected at all.

The thing to remember (and what most politicians forget) is that the government is not a money-making enterprise. The function of government is to facilitate wealth creation. The alcohol industry in a net wealth destructor, hence government has to discourage this industry by policy. The contraction of the alcohol industry results in many benefits elsewhere - apart from the direct "a rupee less spent on alcohol is a rupee more spent on other items", there are benefits in public health, law & order, judiciary & litigation, enforcement etc.

Originally Posted by Samurai

Even at other places, now bars/pubs will move into residential areas to get far enough from the highways. That is a new can of worm waiting to be opened. Enforcement is the only way to really reduce DUI, just moving the shops away will not do it.

Enforcement is an intervention on the demand side. Moving the shops is an intervention on the supply side. Policy intervention needs to be from both sides, else it will not produce the desired outcome. I personally am not fully convinced that "enforcement is the only way to reduce DUI". DUI squads cannot be stationed at the egress points of every single alcohol outlet; they have to be spaced out - which will result in stretches of roads where there is no enforcement. Further, enforcement cannot happen during rush hours/daytime due to the bottleneck the procedure creates. Finally, there is about 30K km of national+state highways in Karnataka. If we assume a DUI squad of 3 members every 5 km, we need 18000 cops per shift - 18% of the total police force.

Bars and other alcohol outlets need local self-governance bodies' NOC to function. If the representatives of these bodies put their foot down, bars will not be able to shift to residential areas either. With 50% women's reservation in these bodies (a demographic that consumes far less alcohol but bears the brunt of its social impact) they can make a difference. This is already seen in Kerala - the KSBC is unable to find alternate locations for its outlets (affected by this decision) due to massive backlash at the local level. Even in Bangalore, Indira Nagar (100 ft road and neighbourhoods) is rising in unity against the proliferation of bars; hopefully their efforts will produce positive results.

[Samurai]

Originally Posted by binand

The alcohol industry in a net wealth destructor, hence government has to discourage this industry by policy.

This is a strange statement. Economics is a pet topic of mine, so I really want to understand how you can justify this statement. And please, use economic data and not moral values argument.

Originally Posted by binand

Moving the shops is an intervention on the supply side.

Are you suggesting prohibition actually works? This is based on the data from which state or country?

Originally Posted by binand

DUI squads cannot be stationed at the egress points of every single alcohol outlet;

And why should they? DUI is tackled in developed countries without touching the supply side.

[haria]

Update:
SC Ban on liquor shops near highways to remain

http://www.thehindu.com/news/nationa...le17751013.ece

Salient points:

Ban extends not only liquor outlets, but also to include pubs, bars, restaurants, etc. located on the highway.

Not only National highway, but also includes State highways and important arterial roads.

No liquor zone to be 220m instead of 500m for places with population less than 20000

Himachal pradesh - instead of 500m, it is 220m

TN and Kerala's petitions on modifying the guidelines rejected.

Sikkim, Meghalaya have got exemption from the 500m rule - due to consideration of the terrain. (Not sure whether this is a good move - more dangerous to have DUI issues in hilly terrain!)

The wordings say from April 1st or when the license comes for renewal. Which means state like TN, the ban starts from today. Karnataka and AP, gets till Sep.30 and Telengana gets June 30.

[binand]

Originally Posted by Samurai

This is a strange statement. Economics is a pet topic of mine, so I really want to understand how you can justify this statement. And please, use economic data and not moral values argument.

Economics was a pet subject at b-school for me too. Note that this kind of study is not available for India; I have data only for the US. Here are some numbers:

1. The size of the alcoholic beverages industry in the US in 2016 was $211 billion. - http://www.parkstreet.com/alcoholic-...rket-overview/

2. In 2006 - a good 10 years prior to the above - the economic cost of binge drinking was estimated to be $223 billion. - https://www.cdc.gov/features/alcoholconsumption/

3. Even in 2016, the cost of alcohol related problems was $176 billion. The economic cost (cost of lost productivity, DUI related costs, cost of justice system etc.) must take that number well over the size of the industry. - http://www.alcoholpolicymd.com/alcoh...alth/costs.htm

Originally Posted by Samurai

Are you suggesting prohibition actually works? This is based on the data from which state or country?

Prohibition is supply-side intervention. My position is that it will not work on its own unless there are compatible demand-side intervention too.

Originally Posted by Samurai

And why should they? DUI is tackled in developed countries without touching the supply side.

Which developed country has tackled DUI without touching supply side? A successful tackle of that kind will result in little or no DUI-related accidents or deaths. Has any country accomplished that? Even today about a third of all road accident deaths in the US are in DUI crashes.

[Samurai]

Originally Posted by binand

Economics was a pet subject at b-school for me too.

Same here. In fact, it was the only exam I wrote physically at Wall Street.

Originally Posted by binand

1. The size of the alcoholic beverages industry in the US in 2016 was $211 billion.
2. In 2006 - a good 10 years prior to the above - the economic cost of binge drinking was estimated to be $223 billion.

Sorry, this is not what I asked. I don't need to be convinced about the cost of alcoholism, my question was different.

Your data would be relevant if we are talking about P/L of an industry. For example, most people in my district have discontinued traditional farming because it is a net wealth destructor. Due to the high cost of labour, traditional farming can only earn 70-80% of the cost. So people have given up farming and have taken jobs in retail or manufacturing sector.

But liquor industry is not like farming. Net loss doesn't mean capital/resource will flow to other industry. Lots of countries have tried prohibition only to revoke it later. The cost of maintaining prohibition turned out to be much more than the cost of alcoholism. Instead, they made it legal, so that it can be controlled and taxed heavily. The revenue generated by excise duty is huge for most Indian states. It is a proven fact that increasing the cost of alcohol, does reduce the consumption. But this is a method that can't be stretched beyond a point. If you make it too expensive, it will lead to illicit liquor production/consumption and then the cure is worse than the ailment.

Originally Posted by binand

Which developed country has tackled DUI without touching supply side? A successful tackle of that kind will result in little or no DUI-related accidents or deaths. Has any country accomplished that?

Oh, you are looking for farming kind of situation again? Losses can make a farmer quit farming, but it won't make typical drunk-drivers giveup drinking.

Consider a demand-supply graph. The hardcore drinkers (who mostly drink and drive) are usually at the higher end (left side) of the demand curve. Moderate drinkers (who rarely drink and drive) are usually at the low end (right side) of the demand curve. When you move the supply curve to the left, using higher price or restricted access, who really gives up drinking? Obviously, the ones in the low end of demand curve, but not the hardcore drinkers who commit DUI.

This is why countries with mature policies have left the supply side untouched. Instead, they focus on enforcement via DUI checkpoints to catch the real culprits. For example, I remember that in NJ one could get his car impounded and even lose the DL if caught while DUI. Without a car/DL, you can be crippled in NJ. That is a big deterrence for DUI.

I am skeptical of this 500 meter rule because it only touches on the supply side, making it slightly difficult to obtain liquor. That won't stop the hardcore drivers, who usually commit DUI. Meanwhile, it has destroyed tens of thousands of legitimate businesses, and put their employees out of work. I know many who invested heavily (often running in crores) quite recently in new bars/pubs, taking loans and putting their life savings. The legal business they started, is now wrecked.

[blackasta]

Originally Posted by Samurai

The legal business they started, is now wrecked.

In addition to that, black marketing, bottle-under-the blanket in dhabas, and moonshine shall be on the rise.
Anyone who thinks prohibition stops diehard drunkards from drinking is living in a fools paradise.
As you mentioned, prohibition / supply side control only dissuades the moderates and the occasional drinkers, and they were the not the ones responsible for DUI anyway in the first place.

[phamilyman]

Forget all of the logical arguments for / against binge drinking, the moot point here (allow me to wear my consultant hat here), is the hon. SC's hypothesis that liquor vends located on the highway increase DUI. Moving them 500m away solves the DUI problem substantially.

Now the problem with such a decree is that it is based in opinion when extensive data is available. The first question was whether in-city DUI has anything to do with liquor vends on arterial roads. And whether removal of "convenient" liquor vends reduced DUI.

Now all of this could've been achieved with a simple 3-6 month pilot in any of the specific that are the most affected (again, data is available!). From the news, nothing of this sort has been done.

Why are such sweeping and disruptive decrees passed purely on the moral "strength" of an idea, than by truly experimenting and seeing whether the theory holds up in real life?!

[Carpainter]

Originally Posted by phamilyman

Why are such sweeping and disruptive decrees passed purely on the moral "strength" of an idea, than by truly experimenting and seeing whether the theory holds up in real life?!

Not only that, as fellow bhpians had already mentioned, it doesn't actually solve the problem either. Hard core drink and drive cases (read mostly interstate truck drivers) will still occur no matter how far these shops have been pushed away from highways. Rather what this judgement did is it squashed away the livelihood of lakhs of people. Don't just think about these hotel/bar/shop owners. Think about all those who were employed in these shops/bars etc. They are all from poor families and many of them were the sole earners of their families. In one sweep SC has taken their bread away. Only if this collateral damage was worthwhile.

When this fact can not be proven or justified by valid data that only removing shops from highways will put drunk driving to a complete stop, this sort of judgement purely on the basis of individual notion is a typical example of judicial overreach. And sadly in India, we are seeing more of this more often than not recently.

[AltoLXI]

This is changing the goal posts

http://timesofindia.indiatimes.com/c...w/57967014.cms

[binand]

Originally Posted by Samurai

Your data would be relevant if we are talking about P/L of an industry. For example, most people in my district have discontinued traditional farming because it is a net wealth destructor. Due to the high cost of labour, traditional farming can only earn 70-80% of the cost. So people have given up farming and have taken jobs in retail or manufacturing sector. [...]Net loss doesn't mean capital/resource will flow to other industry.

Here you are talking of earnings and cost in a purely accounting sense. The economic sense of the terms is what I was talking of. In the economic sense, the cost includes opportunity cost. If the alcohol industry added $211 billion to the US GDP (which is also strictly speaking, not true because part of that must be B2B sales to hotels, restaurants and the like and hence double-counted) and the US spent more than $211 billion on issues in healthcare, law & order, criminal justice, loss of productivity etc. arising out of alcohol consumption then the industry is a net wealth destructor in the economic sense.

Anyway, this discussion is now probably off-topic for this thread; so I'll be happy to take it off from here to PMs.

Originally Posted by Samurai

It is a proven fact that increasing the cost of alcohol, does reduce the consumption. But this is a method that can't be stretched beyond a point. If you make it too expensive, it will lead to illicit liquor production/consumption and then the cure is worse than the ailment.

I am not questioning this point; in fact I totally agree with it. This increasing the (accounting) cost to reduce consumption is one of the measures I had in mind when I spoke about supply-side intervention; but as you say it only goes so far. Beyond that is the present measure - which in effect, increases the opportunity cost. Therefore, in an economic sense the 500m limit complements the taxation regime.

Originally Posted by Samurai

Consider a demand-supply graph. The hardcore drinkers (who mostly drink and drive) are usually at the higher end (left side) of the demand curve. Moderate drinkers (who rarely drink and drive) are usually at the low end (right side) of the demand curve. When you move the supply curve to the left, using higher price or restricted access, who really gives up drinking? Obviously, the ones in the low end of demand curve, but not the hardcore drinkers who commit DUI.

I thought about this a bit; and I am not convinced you are doing the right analysis here.

- First, the people on the left side of the demand curve are not "hardcode drinkers". They are the people who are willing to pay a lot more than the market discovered price for their alcohol. If we consider all types of alcohol as fungible, then these are the people who buy imported champagne and single malt scotch whisky and the like.
- Second, your "hardcore" and "moderate" classification is about the amount and frequency of consumption I imagine; it can't be a direct indicator of whether someone DUIs or not. Occasional drinkers will DUI too; and I reckon they are more likely to DUI (since they consume alcohol only occasionally, they might not be fully aware of the cognitive effect of alcohol on themselves).
- Third, alcohol I think is price-inelastic on the demand side; so the kind of "give up drinking" you postulate might not happen with a price rise. What is more likely to happen is that discretionary spending elsewhere will be cut by consumers in response to a price rise of alcohol.

Originally Posted by Samurai

This is why countries with mature policies have left the supply side untouched. Instead, they focus on enforcement via DUI checkpoints to catch the real culprits. For example, I remember that in NJ one could get his car impounded and even lose the DL if caught while DUI. Without a car/DL, you can be crippled in NJ. That is a big deterrence for DUI.

Yet, I imagine even in NJ there will be vast stretches of roads where someone could DUI without being caught at all hours of the day, and there will be several hours a day when one encounters no DUI checkpoint on all roads. I couldn't find an authoritative link, but some reading I did suggests NJ saw an increase in DUI from 2015 to 2016.

Btw, in multiple pubs in the UK I have seen this system in place: Among a group of drinkers, one or more are designated as drivers and will not be served alcohol (the group informs the bartender beforehand). If the designated driver (or a solo drinker, or anyone, really) wants to drink they then surrender their vehicle keys to the bartender (who will then arrange for the cab/minicab to take them home). I'm not sure how this system came into being; but I imagine as a demand-side control it is far more effective than DUI checks though it operates on the honour code.

Originally Posted by Samurai

I am skeptical of this 500 meter rule because it only touches on the supply side, making it slightly difficult to obtain liquor. That won't stop the hardcore drivers, who usually commit DUI. Meanwhile, it has destroyed tens of thousands of legitimate businesses, and put their employees out of work. I know many who invested heavily (often running in crores) quite recently in new bars/pubs, taking loans and putting their life savings. The legal business they started, is now wrecked.

On the other hand, these "legitimate businesses" must have done their homework prior to starting them; that their licenses are granted only for one year at a time, and that there are multiple litigation at all levels of the justice system that could adversely affect their business, that there are political parties that have promised prohibition in their manifestos which could ascend to power come next election, that every rung of the executive from district collector upwards could stop their trade with little notice, that the supreme court has ruled years ago that article 19(g) does not apply as-is to alcohol retailing and so on.

Originally Posted by AltoLXI

This is changing the goal posts: http://timesofindia.indiatimes.com/c...w/57967014.cms

I haven't fully researched this yet, but I don't think (from what I've seen so far) this is a decision the states are going to take quickly or lightly due to the following reasons:

1. State highways get union government funding from the cess collected and various infrastructure development programmes. Once you start denotifying state highways, you end up with lesser share of such funds.
2. The power of states to collect toll on non-state highways is limited. This will affect the states' ability to develop such roads on BOT basis.
3. The maintenance of these denotified roads will become the responsibility local self-government bodies (panchayats/municipalities/corporations) who seldom have the funds or the knowhow to maintain such roads.

Net effect of all three seems to me is that roadways development will take a huge step backward in the states that choose to go down this denotification path.

[Samurai]

Originally Posted by phamilyman

Why are such sweeping and disruptive decrees passed purely on the moral "strength" of an idea, than by truly experimenting and seeing whether the theory holds up in real life?!

Isn't it the trend these days in India? The ban on sunfilm or the ban on 2+ liter diesel engine, was all based on feel good factor and not data driven. There is no study later on the impact of the ban either.

Originally Posted by binand

Here you are talking of earnings and cost in a purely accounting sense. The economic sense of the terms is what I was talking of. In the economic sense, the cost includes opportunity cost.

Dude, you missing the whole point. You can't talk about opportunity cost when it comes to drinking. It can't be eliminated. Can you calculate the opportunity cost of sleeping, pointing to all the loss of productivity? A vast section of people will drink, even in prohibition states, there is no way around that.

Originally Posted by binand

Anyway, this discussion is now probably off-topic for this thread; so I'll be happy to take it off from here to PMs.

Why? What's the point of that? This is a discussion, so we can discuss openly.

Originally Posted by binand

I thought about this a bit; and I am not convinced you are doing the right analysis here.

Looks like you don't know enough hardcore drinkers.

Originally Posted by binand

Yet, I imagine even in NJ there will be vast stretches of roads where someone could DUI without being caught at all hours of the day, and there will be several hours a day when one encounters no DUI checkpoint on all roads.

There is no need to catch every drunk driver. Even if they catch 5% of them every day, and cancel their DL and impound their cars, the word will get around. That is how deterrence works.

Originally Posted by binand

On the other hand, these "legitimate businesses" must have done their homework prior to starting them; that their licenses are granted only for one year at a time, and that there are multiple litigation at all levels of the justice system that could adversely affect their business, that there are political parties that have promised prohibition in their manifestos which could ascend to power come next election, that every rung of the executive from district collector upwards could stop their trade with little notice, that the supreme court has ruled years ago that article 19(g) does not apply as-is to alcohol retailing and so on.

You have finally convinced me that you have no domain knowledge in this area, and are purely arguing from armchair perspective. Once given, the license is renewed every year. I know many bar owners, who are relatives and friends. Don't remember anyone being worried about their annual renewal. Annual grumbling is usually about increase in renewal fee and bribe, and never about failure to renew. The state governments heavily depend on excise tax, and licence fee. Why would they threaten it? In fact, I am told excise officers are all in panic. About 80% of their bribe providers are shutting down.

I also realise you are not an entrepreneur, so you don't know what kind of risk taking is involved in starting a business. Any business needs certain stable environment to operate. An entrepreneur usually plans for all kind of challenges and situations. But a change in law that bans your business is not something any business will prepare for.

[binand]

Originally Posted by Samurai

I know many bar owners, who are relatives and friends.

Now I understand why you are batting for the liquor industry. I on the other hand have lost people who mattered to me in DUI accidents, so it is unlikely that we'd ever come to an agreement. And since now we have reached ad hominem levels I'll refrain from further comments.

[Ramon]

I am a teetotaler. This order has not affected me adversely in any manner.

But yes... It's brought out a positive change in my life.

There was a liquor shop near my wife's house (Bakery Junction, Trivandrum for those of you familiar with Trivandrum). It was a challenge to pass the shop. If we want to take an evening walk or go to one of the restaurants at the junction we had to pass by this shop. It's difficult to walk with the stench of liquor and unruly people throwing around cuss words and abuse and having brawls at any point of the day not to say anything about the inevitable ones who have passed out from drinking liquor right on the spot.

Some can be seen queing up as early as 7 in the morning for a shop that opens at 10.

If we shun walking and take the car, again these very same people would have their vehicles parked haphazardly choking the flow of traffic.

Very often I have seen shamefaced wives waiting by the roadside along side a two wheeler with small kids while the husband has joined the queue​ to get his daily quota without which he would not survive?

When the ruling came I was happy that he store would be closed.

But horror of horrors. The store was being shifted to near my house at Nanthencode. And that too right at the entrance to a small lane leading to the back gate of a nearby girls school. Imagine the plight of the girls having to deal with this on a daily basis.

The local people along with the school students under the leadership of teachers, local political and social leaders rose up as one and put an end to it.

Otherwise I shudder to think if the same scenario at Bakery Junction had repeated at Nanthencode in a residential area with small kids, a girls school and an even narrower road.

Good riddance to bad rubbish.