Industry

The government's move to ban imports of foreign liquors is leading to smuggling of the expensive booze that are enjoyed by thousands of urban Nepalis, traders say. 

Bottled alcoholic beverages contribute only 0.10 percent to Nepal's total forex outflow, say traders, and that amounts to Rs. 1.5 billion (USD 12 million) annually, according to a press release statement by the Liquor Importers Association of Nepal (LIAN).

But it generates more than twice the amount in government revenue with earnings standing at Rs. 3.3 billions.

The Government of Nepal extended the ban on imports of luxury items like alcohol, tobacco, automobiles and more on July 17 for another 45 days. The ban on liquor will have “adverse effects if the decision is not reversed immediately,” according to the statement.

The association also has noticed that counterfeit/duplicate liquor of some international brands is available in the market, which will have a “huge impact on public health at large in the Nepalese society.”

“Large quantities of popular brands are starting to get smuggled from across the border from India via UP & West Bengal due to huge gap in Nepal MRP Vs India MRP in these Indian states,” added the statement.

According to the association, the FOREX outflow is around USD 15 per litre when importing bottled alcoholic beverages. When this bottle is sold through the hotels, restaurants and bars (HOREBA) chain, they generate USD 120 per litre.

But the loss of revenue in these HOREBA chains will bring a question to their sustainability. “With increased cost pressures HOREBA will be forced to lay off employees resulting in unemployment,” added the statement.