Show Cause Notices on Five Liquor Cos

Excise Commissioner has written to Excise Secretary to cancel manufacturing licenses of two beer producing companies

Published: 21st April 2015 06:06 AM  |   Last Updated: 21st April 2015 06:06 AM   |  A+A-

BHUBANESWAR: The State Government on Monday issued show cause notices to five liquor companies asking them why their label registration should not be cancelled. The companies have been asked to reply by April 25.

This apart, the Excise Commissioner has written to the Excise Secretary to cancel manufacturing licenses of two beer producing companies - United Breweries and SABMiller group.

The breweries, which have been served show cause, are Carlsberg, United Breweries Ltd, SABMiller India, MP Beer Products Ltd and Devans Modern Breweries Ltd. These five companies have a market share of about 70 per cent of the beer trade in State.

Cause Notices.JPGThe Odisha State Beverages Corporation (OSBC), the State-run wholesale distributor of beer and Indian Made Foreign Liquor (IMFL), had urged the Government on April 17 to cancel factory licence and label registration of these five breweries for not signing agreement for supply of beer for 2015-16 at reduced offer price. The OSBC move came a day after the deadline for signing the agreement expired on Thursday.

When the Excise Department is acting tough on the five liquor companies, Excise Secretary SP Thakur said the State Government is in the process of constituting a committee to resolve the crisis. Thakur exuded confidence that the proposed committee to be headed by Development Commissioner UN Behera will find a solution to the problem.

Director General of All India Breweries Association (AIBA) Sovan Roy told this paper that such an attitude of the Government will not solve the problem. Ultimately, the Government will be the loser in terms of revenue, he said.

“It is very difficult to supply beer at a rate which is not feasible. Nobody can do business with loss,” Roy said.

Roy said the Association had made a representation to the State Government on March 12 requesting for a discussion on the issue. The Government is yet to respond to AIBA’s request, he said.

The five breweries, which sell leading beer brands, have been opposing the reduction in offer price of beer to the extent of 20 per cent as per the new Excise policy of the State.

The beer producers feel that the stiff cut in offer price would result in business loss of over `100 crore per annum. They also fear that agreeing to Odisha’s demand would open flood gates for other States to arm-twist them to sign agreements at lower offer rates.

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