Kerala distilleries seek hike in liquor prices

December 20th, 2011 - 5:17 pm ICT by IANS  

Thiruvananthapuram, Dec 20 (IANS) Even as sales of liquor and revenue earned by way of taxes on it are going up in Kerala, the 11 distilleries in the state are appealing to the government to hike alcohol prices due to rise in raw material costs.

Sales of liquor are expected to cross Rs.7,000 crore for the current fiscal and the revenue earned by the government on it is likely to touch Rs.6,000 crore.

But distillers say their margins are under strain.

V. Ravindran, vice president of Amrut Distilleries, which is a part of the the Kerala Bottlers Federation (KBF) and Association of Distillers, Brewers and Viners of India (ADBVI), said that all their pleas so far have fallen on deaf ears.

“Prices of raw materials are shooting up by the day. Normally, the price of extra neutral alcohol (ENA) starts to fall when sugarcane harvests begin in the last quarter of every fiscal, but with exports of rectified spirit from Maharashtra, the price of ENA is likely to go up further,” Ravindran told IANS.

The basic raw material for alcohol, sugarcane, is turned into molasses, which is fermented to get rectified spirit and ENA is the final product.

Kerala, being alcohol deficient, depends on states like Maharashtra, Karnataka and Uttar Pradesh for its alcohol requirement.

The per litre price of ENA, which recently went up from Rs.32 to Rs.45, is expected to go up further because of the huge export from Maharashtra.

“Kerala’s liquor industry did not receive any price increase for the past seven years except in one year, i.e. 2009-10, when it was given an increase of 6 percent for products above Rs.400 per case and 4 percent for products below Rs.400 per case,” said Ravindran.

Kerala today has 708 bar hotels and 383 retail outlets, which are owned by the state government.

“We wish to get an increase of at least Rs.20 per bottle,” said Ravindran.

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