Friday, Oct 31, 2014

What Kerala bar ban will cost: investments worth Rs 10,000 cr, 25,000 jobs

liquor Of the 753 bar hotels, 16 are in five-class category , around 50 in four class and 300 in three star. The bar hotel industry, which directly employees 25,000 persons, has a business of Rs 1,500 crore.
Written by Shaju Philip | Thiruvananthapuram | Posted: August 23, 2014 12:36 pm | Updated: August 23, 2014 4:09 pm

The Congress government decision to close down all liquor bars, except the five-star ones, before the end of this fiscal has cast a pall on state’s flourishing hospitality and tourism industry.

The state has 753 bars, of which only 16 are in five-class category. As many as 418 bars have been closed since April this year. As discrimination was alleged on the part of government, Chief Minister Oommen Chandy on Friday announced there were no hiccups to suspend the liquor license of other hotels operating now. “The government has got legal advice to revoke the license of the bars operating now. ‘’

According to bar hotel industry sources, the total investment in the hotels at stake would be Rs 10,000 crore. Of the 753 bar hotels, 16 are in five-class category , around 50 in four class and 300 in three star. The bar hotel industry, which directly employees 25,000 persons, has a business of Rs 1,500 crore. Last year, the industry has contributed Rs 2300 crore to the state exchequer in the form of license fee, excise duty and sales tax.

“At least 100 hotels have availed loans from government run Kerala Financial Enterprises. Since the government policy was to give license for only three-star and above hotels, most of the new projects are in that category. Now, the investment faces uncertainty,’’ says Raj Kumar, general secretary of Kerala Bar Hotel Owners Association.

The new three and four class bar hotels are facing closure as most of these facilities have come up outside the cities. After the government brought restrictions on building bar hotels near educational institutions and religious centres, many investors went out of the city in search of safe locations.

“These hotels would not get customers for lodging and dining as the hotels in the city do get. If liquor license is gone, the project would turn into a loss of investment,’’ industry sources said.

Many in the industry feel that that the businessmen got in between the group politics of Congress. “If prohibition was the genuine idea, why the government order closure of all outlets of the Kerala Beverages Corporation. The present policy would not bring down alcoholism. Government would continue to get its income from Bevco. The losers would be the bar hotel owners,’’ he said.

The state’s tourism industry also was caught unawares of the government liquor policy. Last year, Kerala tourism industry clocked revenue of Rs 24,000 crore.

Sources at Confederation of Kerala Tourism Industry said the decision was an emotional and immature one. “A day after the new liquor policy came out, many foreign continued…

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