‘Liquorgate’ in Kerala? How Left govt has diluted the state’s liquor policy

This comes at a time when the Kerala government is considering further watering down the state’s liquor policy to facilitate more sale of India-made foreign liquor (IMFL) in the state. The Congress-led Opposition has alleged a scam of Rs 25 crore, and called for the resignation of Kerala Excise Minister M B Rajesh.

Under the last eight years of Left rule in Kerala, the Congress-era liquor policy has been incrementally diluted. Here is how.

Congress’ plans for ‘total prohibition’

In 2014, the Congress-led Kerala government unveiled a liquor policy aimed at making the state “liquor-free” within a decade. At the time, the state had 753 licensed bars. Of these, 418 ‘substandard’ ones were shut in April 2014, and the new liquor policy led to the closure of 312 more running bars.

The government limited liquor licenses to 5-Star hotels, and issued only 16 bar licenses across the state. Other bars previously selling IMFL were allowed to function as wine and beer parlours. Moreover, the liquor policy contained a plan for the systematic closure of the state’s 384 liquor outlets (shops), at a rate of 10% every year.

It is in this context that the 2016 state assembly elections were held — the state’s liquor policy was in the forefront of election manifestos. Unlike Congress’ plan for total prohibition, the Left Democratic Front (LDF) manifesto was more measured. While it did want to reduce the availability of liquor in a phased manner, its focus was on running campaigns promoting abstinence and increasing the minimum drinking age (to 23 from 21).

LDF reverses Congress’ liquor policy

In June 2017, a year after coming to power, the LDF government reversed the Congress’ stringent liquor policy, allowing sale of IMFL in hotels with 3 and 4-star classifications, and continuing the sale of beer and wine in 2-star hotels. Interestingly, all hotels were given an opportunity to upgrade their classification (to 3 or 4 stars) in order to be able to sell IMFL. The government also decided to allow serving liquor in hotels’ banquet halls (with a licensing fee), and in Kerala’s domestic airports.

A reason behind this change was the massive loss of employment following the Congress’ 2014 decision in hotels and bars. An estimated 40,000 workers had lost their jobs after the closure of bars by the Congress regime. The state’s tourism and hotel industry also complained that Kerala lost out on conventions and meetings due to the liquor policy of the state

In the 2016 elections, both bar owners and employees (current and former), by and large, stood with the Left.

Subsequent easing of Kerala’s liquor policy

When LDF assumed office in 2016, the state had only 29 bars selling IMFL, and 813 beer/wine parlours. Of these 814, most used to sell IMFL before they lost their license under the Congress’ liquor policy.

During the LDF’s first term, from 2016 to 2021, as many as 442 wine parlours were given bar licences after receiving the aforementioned 3 or 4-star upgrade. Besides, 200 new bar licences were handed out during the period.

LDF’s second term (since 2021, till January this year) has seen 97 new liquor licenses being issued. Besides, three dozen beer parlours have been granted an IMFL licence, taking the total bar and beer licences in the state to around 900. Moreover, the government’s dashboard shows several more applications are currently being processed.

The liberalisation of Kerala’s liquor policy, however, has been largely tailored for the benefit of bars and hotels. In 2016, the state had only 306 liquor outlets. At present, this number has only risen to 320. While bar licenses were handed out a dime a dozen, retail outlets have not been extended the same benefits. In 2022, the government wanted to open 175 new outlets but none started functioning so far.

LDF’s latest proposals

While nothing is concrete as of yet, the state might announce a new liquor policy following the completion of the ongoing Lok Sabha polls.

Proposals here include lifting Kerala’s monthly dry day, a practice prevailing since 2003, introduced by the then Congress government to reduce liquor consumption. Hotel and bar owners have long complained that the dry day impacts the state’s tourism industry.

Besides, state-run BEVCO, sole distributor of IMFL in Kerala, also wants to lift the dry day to increase its income. The sale of liquor makes up a major chunk of Kerala’s non-tax revenue.