Publication:- The Times of India
The International Spirits & Wines Association of India ( ), a representative body of premium alcoholic beverage companies, on Saturday criticised the government’s alleged move to take over the liquor trade stating that it will disrupt the sector which is already battling the effects of the Covid-19 pandemic.
Last week, the state cabinet approved the roping in of Chattisgarh Beverage Corporation Limited (CBCL) as an advisory to the excise department and its beverage corporation limited for hand-holding exercise to help the tribal state increase its revenues. The liquor retailers and the associations apprehend that this is the first step towards the government’s plan to take over the liquor business claiming that a similar move in Jharkhand and other states had failed in the past
Criticising the regular change in government policy, Suresh Menon, secretary-general, ISWAI, said, “The recurring changes in the alcohol beverage retail model in Jharkhand may once again disrupt the business and pose myriad challenges due to issues of supply chain that may have a bearing on consumer choice and availability. During the earlier regime in 2017, a similar move was adopted which led to denial of sale of known brands, the exponential growth of sale of little known brands, lack of stock visibility in retail and a non-transparent payment process. As an impact of that policy, the industry is still facing the fallout of the earlier government-in-retail experiment by way of outstanding overdue for over two years.”
Due to fiscal losses and the opposition’s criticism, the government had withdrawn its regulation over retail trade in 2019.
As a result, both the revenues and sales volumes increased compared to the years when the retail was under the state government/Jharkhand State Beverages Corporation Ltd (JSBCL) control.
“For example, Jharkhand government had generated revenue of Rs 957 crore during the financial year 2016-17 that decreased to Rs 846 crore during 2017-18 when it started selling liquor. After the change in model to private retail in 2019, revenue increased to Rs 2,084 crore and declined slightly to Rs 1,859 crore during the Covid pandemic. Industry numbers suggest that there has been no downward trend in liquor consumption in the states in the last two years,” said another official of ISWAI.
Nita Kapoor, chief executive officer of ISWAI, said that while the pandemic has disrupted normal business across the sectors, due to Covid restrictions in Jharkhand and significant tax increases has led to a decline in the alcoholic beverage business.
Kapoor added, “For many years, Delhi too had a retail model regulated by government but it had to ultimately bring in private players for better revenues. Even Andhra Pradesh too is trying to woo back private players in the face of considerable loss of revenue and a public outcry about popular brands being unavailable. Hence, the ISWAI urges the Jharkhand government for a fair, transparent and robust business model in the state. For a sector that is a key source of the state’s own tax revenues post-GST, such frequent changes in route-to-market (RTM) are undesirable and would disrupt the industry.”