Kerala liquor policy: Belated breather for battered Bevco

Bevco was forced to close 179 of its 270 outlets following the Supreme Court order asking states to close liquor shops along the highways.

Published: 11th June 2017 03:39 AM  |   Last Updated: 11th June 2017 03:41 AM   |  A+A-

Express News Service

THIRUVANANTHAPURAM: The LDF government’s new liquor policy has gifted a breather for the Kerala State Beverages Corporation (Bevco), scrambling to relocate outlets closed along the highways. 

Better revenue prospects have opened up with the policy allowing bars in hotels with ratings of three-star and above. However, of its 270 outlets, Bevco was forced to close 179 following the Supreme Court order asking states to close liquor shops along the highways. 

Around 85 Bevco shops still remain shut as public protests have prevented the agency from finding new spaces to house them. The lion’s share of the revenue come from the outlets. (In 2016-17, the annual turnover was Rs 12,134 crore, of which Rs 9,900 crore came from Bevco outlets alone.) 

According to Bevco officials, the average per-day sales at each of its outlets is a whopping Rs 10.40 lakh. Excise Minister T P Ramakrishnan had informed the Assembly in May that Bevco’s annual turnover could crash by Rs 1700-2000 crore, if the shops continued to remain shut. 

“There is an expectation the liquor policy will trigger an increase in revenue. But that remains to be seen,” V G Shaji, finance manager, Bevco, said.

Recently, Bevco had increased its warehouse margin from 24 per cent to 29 per cent - with prices going up by Rs 10 to Rs 20 across brands - to compensate for the shortfall from the closed shops.

The UDF government’s liquor policy, which downed shutters on 730 bars in the state in 2014, did not really eat into Bevco’s revenue as the government had raised the tax in September that year to compensate for the loss. The government had increased the tax on Indian-made foreign liquor from 115 per cent to 135 per cent, targeting an additional revenue of Rs 1,130 crore. The tax on beer and wine went up from 50 to 70 per cent, eyeing a further Rs 100 crore. Also, most bars had later mutated into beer/wine parlours.

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