Kerala is in the process of formulating a new liquor policy which could be a game changer in terms of the way liquor is sold, served, and regulated in the state. The UDF government (Congress-led), which is in power under Chief Minister V.D. Satheesan, is reviewing a number of decisions that were made during the LDF administration. The areas under review include bar operating hours, liquor licenses, retail sales, and restrictions on the consumption of liquor.
The policy is due to be finalized by November 30, 2026. The stated aim is to strengthen the regulation of alcohol and promote responsible drinking, without in any way damaging the state's tourism and hospitality industry. The vast majority of the proposed changes have not yet been implemented, so the existing liquor regulations will continue to apply.
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One of the major proposed changes is to bar opening hours. Currently, under the existing rules, hotel bars can operate from 10 a.m. until midnight. The new government is considering reducing those hours to 11 a.m. to 11 p.m. The special permission previously given to certain hotels to serve after midnight is also under review. The proposed restrictions would clearly have an impact on the operations of hotels, restaurants, and the broader hospitality sector, particularly for those in tourist areas who rely on late-night business.
Bar licensing is another major issue as on November 4, the Chief Minister, made it clear that no bar license should be issued without the knowledge of the government. This statement followed reports that the excise department had actually issued licenses, including for airport lounges without informing the government. The government is going back to the drawing board on the approval process and will ensure that future licenses are in line with its liquor policy. It is reported that around 29 applications are still pending, and there is also a discussion regarding the rigor of assessing new licenses and the number of bars.
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Kerala's proposed liquor policy could also impact the way certain alcoholic drinks are made available to the public. There is the issue of horti wine, an alcoholic drink made from fruit and other horticultural produce. The previous government had introduced provisions to allow it to be sold in a range of outlets, including bakeries, supermarkets, and shopping malls. The new government is now seeking to restrict permissions related to this, following the controversy that arose over a bakery license that allowed the sale of horti wine containing around 15% alcohol. The administration is looking to restrict the sale of horti wine to only those outlets that are authorized, i.e., those of Kerala State Beverages Corporation (BEVCO) and Consumerfed.
BEVCO remains the dominant player in the state's regulated liquor retail market. The existing outlets are all open from 10 a.m. to 9 p.m., and there have been proposals to reduce the retail operating hours. BEVCO is also in the process of introducing self-serve outlets and premium liquor counters as part of its retail modernization. In a separate development, Kerala has announced sales tax brackets of 120% on beverages containing more than 0.5% and up to 10% alcohol and 175% on those above 10% and up to 20%. These tax brackets do not themselves authorize the sale of the product; actual availability will be subject to government approval.
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For consumers, the key issue is obvious, will this policy affect where and when you can buy alcohol? If the government moves forward with shorter bar hours, you’ll have less time to go out and have a drink at a bar. Store hours could also be affected, though no decision has been made yet. The drinking age in Kerala is still 23, and the Excise Department has made it clear that they will be enforcing the rules much more strictly regarding serving alcohol to minors. Bars will be expected to check the age of their customers against valid ID, and there is the potential for enforcement action to be taken under the current rules if this is not the case.
The government is also looking at other aspects of alcohol regulation, including toddy and dry day exemptions. There is a proposal for much tighter monitoring of toddy shops to address adulteration and illegal production. Kerala currently has a monthly dry day on the first of each month, and there are very limited dry day exemptions available to eligible establishments for approved events under the existing rules. There is no decision to eliminate the dry day. Consumers should, therefore, continue to follow the existing rules until the government issues and implements the new liquor policy.
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All the information in this piece comes from a variety of news reports and official statements on the proposed liquor policy in Kerala. The reports cover bar hours, licensing, toddy inspections, horti wine, the legal drinking age, and the government’s intentions regarding alcohol. A number of the proposed changes are still in the pipeline and have not yet been implemented.
Kerala’s next liquor policy is likely to have a major impact on the state’s liquor industry, with a raft of proposed changes to the bar licensing system, shorter hours of operation, and more restrictions on retail liquor distribution. The policy is being driven by a desire for greater oversight in light of concerns that licenses have been issued without the requisite administrative awareness. The proposed changes to horti wine and the age verification system are part of a broader approach to alcohol regulation.
However, the final rules are still to be announced. With the policy due by November 30, 2026, bars, retailers, hospitality businesses, and consumers will all be watching to see what the final proposals are and which of them end up as the actual enforceable rules.
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