Kerala: Block the bar and boost the bottle

How Kerala government’s attempt at bringing down liquor consumption appears to have ended up increasing it

Queue outside a government-owned liquor outlet. Source: Express Queue outside a government-owned liquor outlet. Source: Express
Written by Shaju Philip | Thiruvananthapuram | Updated: June 17, 2014 11:32 am

A move aimed at bringing down liquor consumption has backfired on the Kerala government. Consumption is seen as having increased, in fact, ever since the government held up renewal of the liquor licences of 418 bars identified as “substandard”.

Far from depriving tipplers, the move has sent them flocking to outlets of the Kerala State Beverages Development Corporation (Bevco), the state’s sole wholesale and retail distributor for Indian-made Foreign Liquor. In the two months since April 1, Bevco’s earnings have been Rs 200 crore higher than in the corresponding period last year, Excise Minister K Babu told the assembly last week.

“Those who would drink one or two pegs at hotel bars are now buying at least half a litre from Bevco outlets. And an addict exhausts the bottle in a day,” says an excise official.

The government has kept pending a decision on renewing the licences of these 418 bars — the state has 753 — in the wake of state Congress president V M Sudheeran’s campaign for total prohibition in a phased manner. The Congress-led government would have preferred to let hotel bars function with a rider that they improve standards within a time frame, but Sudheeran gained the support of Christian and Muslim groups and got a further boost following a Supreme Court ruling in March.

Under a liquor policy of 2011, the government had decided to restrict new liquor licences only to five-star hotels from 2013-14 onwards. Owners of four- and three-star hotels appealed, and the Supreme Court ruled in March that the government cannot deny liquor licenses to hotels ranked four stars and above until it takes a final decision on the 418 “substandard” hotels.

With those bars closed since then, a government source admits that it “does not make any sense”. “A practical approach would have factored in the fact that there is a section of people who are addicts. After the bars were closed, more people have started drinking in public places or vehicles as many are reluctant to take liquor home.”

Last week, the Kerala High Court asked the government to decide on the fate of the 418 bars within a month.

The business

The Supreme Court had observed, “If the government is really serious about reducing the consumption of liquor, it should also take steps to reduce its own shops and depots. If it is not possible for the government to reduce the existing retail shops, it is of no use to direct the bar hotels alone to function in a particular manner.”

Kerala cannot, however, do without the income from its liquor business. Earnings from liquor, including various taxes, contribute 22 per cent to the state revenue. Bevco, which accounts for about 75 per cent of the liquor business, had a turnover last year of Rs 9,350 crore, after Rs 8,819 crore in 2012-13. Hotel …continued »

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