Indian State Joins Five Provinces in Shutting Down Liquor Stores

  • Madhya Pradesh to close liquor outlets in phased manner
  • Stores near Narmada river shut from April 1 in first phase

India’s central state of Madhya Pradesh is the latest to join an expanding number of provinces in the country to stop liquor sales, adding to the woes of distillers and brewers already grappling with a national ban on outlets near highways.

Liquor stores in the state will be closed in phases, the Madhya Pradesh government said in a statement dated April 9 citing Chief Minister Shivraj Singh Chouhan. Outlets selling liquor in a five-kilometer (3.1 miles) radius of the Narmada river, revered among Hindus, have been shut from April 1 in the first phase, it said.

The Indian state, with a population close to that of France, will be joining five other provinces in the country that have prohibited alcohol. The move is a blow to companies including Diageo Plc-controlled United Spirits Ltd. and Radico Khaitan Ltd. that are already bracing for a drop in sales after India’s top court banned liquor stores within 500 meters (547 yards) from highways.

Liquor outlets will not be allowed to open in residential localities, near educational institutions and places of worship, the Madhya Pradesh government said without providing detail.

Shares of United Spirits plunged 6.7 percent, the most since August 2015. Radico Khaitan fell 7.4 percent and United Breweries Ltd. declined 3.3 percent. The benchmark S&P Sensex Index dropped 0.4 percent.

Madhya Pradesh will start a de-addiction drive, according to the statement. While per-capita consumption of alcohol in India is among the lowest in the world, hazardous drinking -- binge drinking and solitary consumption to the point of intoxication -- has become the hallmark and is practiced by more than half of Indian drinkers, according to a 2013 report on alcohol marketing by New Delhi-based Public Health Foundation of India.

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