The local Liquor shops which reopen across states barring the containment zones witnessed a surge on Monday. Breweries and distilleries were seen moving up in the share markets while the benchmark indices fell over 5%.
Alcohols & Breweries Ltd stands as a winner on Sensex among other liquor stocks, up 10.68% to trade at Rs 188 per share. GM Breweries stands second gaining 9.22% on Monday morning to trade at Rs 408 apiece. Globus Spirits registered a 5% hike, while Radico Khaitan shares surged 4.63%. United Breweries gained 2.54% to trade at Rs 962 per share. United Spirits, Tilaknagar Industries, and Pioneer Distilleries were trading in the red, down over 0.50% each.
The liquor shops falling under red, orange, and green zones are allowed to open under certain rules and regulations. However, serpentine queues were seen outside the shops, breaching social distancing norms. Some of the buyers were seen unmasked.
State governments were demanding repeatedly to open liquor shops in the hope to revive their economy. Taxes collected from the liquor shops add a handsome amount of money in state revenue collection and state governments use it to pay their bills.
The COVID-19 pandemic followed by stringent lockdowns has dried up the pipelines of the distilleries and the restoring may take three to six weeks.
The stock value of alcoholic products is expected to rise and last until the wine shops come into play.
Also for the state governments, the fast-growing liquor market means an increase in the inflow of funds. Possibly an increase in dependence on alcohol revenue