We’re in dire straits: Kerala distilleries

August 19th, 2011 - 8:04 pm ICT by IANS  

Thiruvananthapuram, Aug 19 (IANS) Even as liquor sales and revenue from taxes on liquor sales are shooting up, the 11 private distilleries in Kerala say they are in dire straits and the only way out is for stopping the discounts claimed on the payments made to them by tne state-owned sole wholesaler of alcohol in the state.

“Ninety percent of the liquor sold in the state is produced here itself and with the price of raw materials zooming up, we are in dire straits, Vijayakumar, president of the Kerala Bottlers Federation (KBF) told reporters here Friday.

“We met with Chief Minister Oommen Chandy and pleaded our case that things are bad and not rosy as many think that we are making huge profits,” he added.

“We have not asked the state government to allow a price increase. Instead, we have asked that the cash discount of 7.75 per cent which the Kerala State Beverages Corporation (the sole wholesaler of liquor in the state) levies on us when they make the payment after 45 days be discontinued. Normally cash discounts are there when it is cash and carry business,” M.P. Purushothaman, CMD of Empee Distilleries, pointed out.

The major raw material in manufacturing liquor is extra neutral alcohol and its price has recently gone up from Rs.32 a litre to Rs.48 a litre.

In the last fiscal ended March 31, liquor sales touched an all time high of Rs.6,730.30 crore from Rs.5,539.85 crore in 2009-10.

The government earned Rs.5,239 crore from liquor sales during the last fiscal, up from Rs.4,260 crore in 2009-10.

A break-up of the tax on a bottle of 750 ml of liquor shows that when it arrives at the KSBC, it costs Rs.34 and when a consumer buys it from a retail shop, the price shoots up to Rs.250.

The various levies include 100 percent excise and sales tax, 36 percent wholesale and 20 percent retail taxe and the recently introduced six per cent cess.

“In Karnataka, a similar brand of liquor costs Rs.160 and in Tamil Nadu it is Rs 240. We repeat we do not want a price increase. Instead, just take out the cash discount that is now charged each time our bill is cleared. In all other south Indian states, there is a more industry-friendly approach and they (the state governments) do, from time to time, act on our grievances,” said Vijayakumar.

The last liquor price revision in Kerala was in 2005.

“If something is not done immediately then the 11 (private) companies will find it really difficult to go ahead. We employ more than 12,000 people in this industry,” said Sushil Haksar, director general of the Association of Distillers, Brewers and Viners of India (ADBVI).

There are 683 bars in Kerala and 383 state-owned shops that sell liquor in the retail market.

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