Liquor License, Alcohol Tax & Liquor Business Secrets in India | Mokksh Sani | FO516 Raj Shamani
with Mokksh Sani
Executive Summary
Mokksh Sani - founder of Living Liquidz, Mumbai's premium liquor retail chain - opens the books on India's most regulated business. On every 100 rupees of alcohol, roughly 75-78 goes to the government; states like Karnataka make 36,000-48,000 crores a year from it, which is why the industry is governed state-wise by excise, with no central body and no regulation on pricing. He explains the license economics: in Maharashtra you cannot apply for a new license, you buy an existing one - around 9 crores for a store, with square footage fixed by rule and an 'elite' license buying you one extra hour and a 5,999 sq ft format. He walks through the supply chain (brands to distributors to retailers, 75-location drop-and-deliver logistics), why multinationals are all eyeing India, and the culture shifts: RTDs and breezers arriving from the US, Gen Z still drinking but choosing their days, daily-drinking culture coming. Plus his own playbook: starting a big-format store in 2007, getting Sanjay Dutt to show up for free at Mehboob Studio, the import brand that 'never picked up' because there was no marketing, celebrity liquor brands from Karan Aujla to Bhuvan Bam, and his advice to founders - have enough money to sustain, but run regionally until you prove your numbers.
Key Takeaways
75-78% of every bottle is tax
On a Rs 5,000 bottle, about Rs 4,200 goes to the government; states earn tens of thousands of crores (Karnataka ~36,000-48,000) - the tax structure shapes everything downstream.
You cannot apply for a license - you buy one
In Maharashtra and Goa, new licenses are not issued; you buy an existing one (~9 crores in Maharashtra), square footage is fixed by rule, and 'elite' licenses buy extra hours and bigger formats.
Excise runs everything, state by state
There is no central regulator and no price control: each state's excise department governs sale, timing and structure - which is why the same brand prices and sells differently across borders.
Distribution is the moat nobody sees
Brands sell to distributors, retailers buy from distributors, and a 75-location chain forces drop-and-deliver logistics brands are not built for - scale in this industry is a supply-chain achievement.
Every multinational is eyeing India
Like autos before it, global liquor sees India as the growth market - premiumization, duty-free visibility and global storytelling are how brands get built here now.
Gen Z drinks - on their own schedule
The myth that Gen Z is not consuming is wrong, he says: they are choosing their days and occasions, with RTDs, breezers and daily-drinking culture arriving from the US and Brazil.
Run regionally until the numbers prove
His founder advice from liquor and beyond: raise enough to sustain, but stay regional until your numbers are proven - premature national scale is where most businesses in the space die.
The Conversation Breakdown
The economics: where every rupee goes
⏱ Untimed topicBreaking down a Rs 5,000 bottle - about Rs 4,200 to the government, 75-78% tax - and the state revenues (36,000-48,000 crores) that make alcohol the state's most profitable industry.
License raj, modern edition
⏱ Untimed topicWhy you cannot apply for a new license in Maharashtra, Goa or Karnataka - you buy an existing one; the 9-crore price tag, square-footage rules, 'mansion' and 'elite' categories, and the 25 licenses needed just to import one brand.
The excise machine and the supply chain
⏱ Untimed topicState-wise excise governance with no central body, no price regulation, the brand-distributor-retailer chain, and the drop-and-deliver logistics of running 75 locations.
Culture shifts: RTDs, Gen Z and daily drinking
⏱ Untimed topicReady-to-drink culture arriving from the US and Brazil, why the 'Gen Z doesn't drink' myth is wrong, tourist economies and consumption, and where Indian drinking culture is heading.
Building Living Liquidz
⏱ Untimed topicFrom the 2007 big-format store to a recognized premium chain: duty-free strategy, global storytelling, being looked down on early, and how Living Liquidz became a platform.
Celebrity brands and the Sanjay Dutt story
⏱ Untimed topicGetting Sanjay Dutt to inaugurate for free at Mehboob Studio, the Karan Aujla and pop-culture liquor brands, his own import brand that 'never picked up' for lack of marketing, and what celebrity attachment actually does.
Founder advice and the next opportunities
⏱ Untimed topicWhy most liquor businesses fail at scale, the run-regional-till-proven rule, and where he would bet next - from Varun's 120-rupee segment to QSR formats like Jumboking and the South Indian upgrade gap.
Core Frameworks & Ideas
Tax-first economics
In liquor, start every analysis with the government's 75-78% cut - pricing, margins, formats and state strategy all follow from the tax structure, not from demand.
License scarcity moat
When new licenses cannot be applied for, existing licenses become appreciating assets - the moat is regulatory, so buy and hold prime licenses before building brand.
Prove regional, then scale
Have enough capital to sustain, but run regionally until the numbers prove - premature national expansion is the most common kill shot in regulated retail.
Celebrity as distribution, not marketing
A celebrity name without marketing does nothing (his import brand 'never picked up'); celebrity works only when paired with a brand story and spend behind it.
Actionable Next Steps
- ✓Before entering any regulated industry, map who actually issues the license and whether you can apply or must buy - the answer changes your entire capital plan.
- ✓Break down your own product's price into tax, cost and margin like the Rs 5,000 bottle exercise - know exactly where every rupee goes.
- ✓If you are scaling, stress-test the regional-first rule: what numbers would prove your home market before you open location two?
- ✓Study one adjacent culture shift (like RTDs in liquor) that has not yet hit your market - being early to an arriving habit is a real edge.
- ✓Audit one celebrity or influencer association you are considering: is there a brand story and marketing budget behind it, or just a name?
Notable Quotes
“The state makes about 36,000 crores from alcohol.”
“You cannot apply for a license. You have to buy a license from an existing”
“We are completely governed by excise department in every state and it is state-wise. It's not central body.”
“All the multinationals are eyeing India for their sales.”
“Gen Zs are consuming, but they are probably choosing their days in consuming.”
“I don't say it tanked, it never picked up.”
“have enough money that you can sustain the business but run it only regionally till you prove your numbers.”
The One Thing to Remember
One thing to remember: in India's liquor business, the government is your biggest partner - 75-78% of every bottle is tax, so the real game is licenses, logistics and brand, not just selling.