COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

Booze-makers make beeline for Kerala to ride bottle boom

D Jose in Thiruvananthapuram

Liquor manufacturers are making a beeline for Kerala, a state industrialists dread because of its labour militancy.

Ever since arrack was banned in 1996, the Indian-made foreign liquor segment has been witnessing a boom in the Communist-led state.

Cheap varieties of liquor are also available in plenty through legal and illegal channels.

The Marxist-led government, which is not ideologically bound by the Congress-imposed prohibition policy, seems to have decided to cash in on the growing demand for IMFL.

According to highly placed sources, a move is on to grant licences for more distilleries in the state. Licences have already been issued to M P Distilleries and Amrut Distilleries for opening two units for blending and manufacture of IMFL in Palakkad district. Licence for another unit at Thrissur is also in the pipeline.

The sources said that legal formalities, including site inspection, have been completed in 22 other cases. The applicants are from within and outside Kerala. The matter is now awaiting the cabinet nod. About 15 more applications are in the queue.

IMFL manufacturers consider Kerala a goldmine -- the state has the highest per capita consumption of liquor in the country now. After a record sales of Rs 1.11 billion during the Onam festival season, Kerala has overtaken Punjab in the per capita consumption of liquor.

The Kerala State Beverages Corporation, which is the sole agency for distribution of IMFL to retail outlets in the state, expects the turnover to jump from Rs 10 billion last year to Rs 12 billion this year.

The arrack ban introduced by the then United Democratic Front government headed by A K Antony prior to the 1996 general election, has pushed up the IMFL sales in the state. A recent survey by the Kerala Deshiya Vedi had shown that Keralites were spending more money on liquor than on food.

The Communist government's move to allow 22 new distilleries at one go is bound to face bitter resistance from prohibitionists and the Congress party. The argument advanced in the official circles for granting such large number of licences is that the state is now depending on other states for more than 60 per cent of its requirements. The domestic units have been able to cater to only 40 per cent of the demand.

However, the existing distillery owners feel otherwise. They say that they are fully equipped to meet the demand provided the government allowed them to expand their capacity. But for reasons unknown, the government has not been encouraging this, said a distillery owner here.

The Distillery Owners' Association has questioned the need for more distilleries when existing units in the state were being closed down for various reasons. An association source said that four out of 14 units in the state have stopped production.

The source pointed out that Tamil Nadu where the requirement is much more than that of Kerala, has been managing its demand with seven distilleries.

The Opposition Congress smelt corruption in the move. Party leaders said that they would oppose the step as it would defeat the purpose of the partial prohibition it initiated in the state.

The Kerala government is issuing a large number of licences following the liberalisation of the excise rules by the Centre. Under the liberalised regime, a state government is free to permit new units for blending and manufacture of Indian-made foreign liquor. Earlier, new units could be opened only with the Centre's approval.