KOCHI: Kerala is likely to see long-expected revision of the state excise policy this June. And there is already considerable buzz about possible changes to existing norms.
However, it remains to be seen whether the policy, which has been getting much traction in the media, would measure up to the expectations of stakeholders, especially the tourism industry. Hopes are high for a “positive policy” aimed at boosting tourism.
Some of the changes expected in the new excise policy are the removal of the dry days on the first of every month, allowing standalone restaurants in tourism zones to apply for a three-month licence during peak season, and allowing two-star hotels to apply for beer and wine permits.
“It should be noted that tourism is one industry in Kerala that has been doing well despite several curbs,” says hospitality guru Jose Dominic. “However, the current excise policy has made things difficult for the sector to sustain growth.”
Jose, founder and former CEO of the CGH Earth group, welcomes the “supposed decision to do away with the dry day on the first of every month”. He terms the existing norm an “absurd policy”.
Tourist guide Rajesh P R , too, calls it an “absurd rule”. “It’s a struggle to explain to foreign clients about these dry days. Such a rule doesn’t exist anywhere else in the world,” he says.
Kerala Travel Mart Society president Jose Predeep echoes the same sentiment. “Thanks to this policy, the state has been losing out on big MICE (meetings, incentives, conferences and exhibitions) and destination-wedding business,” he highlights.
“Shutting down bars by 11pm is another dampener. Groups that visit the state, as part of MICE and destination weddings, may have their dinner sessions late in the evening. Stringent closure of bars at 11pm often leads to an embarrassing situation.”
Predeep, along with other stakeholders, has been pushing for bar timings to be revised from 11am to 11pm to 10am to midnight. He suggests that the extension of timing beyond midnight could also be thought of.
“They can charge an extra fee for this, and the excise authorities may be empowered to decide on a case-to-case basis,” he says. “Harsh restrictions cause a huge revenue loss to the hospitality industry and, in effect, the state government”.
Former deputy director of Kerala Tourism Prashant Vasudev agrees, adding that the timing curbs should be “relaxed in hotels and restaurants in tourism zones” on a pilot basis.
Huge losses
When the Kerala Travel Mart recently took feedback from the 5-star properties dealing with the MICE business, it was found that in the 2022-23 fiscal, they had suffered a loss of about Rs 120 crore due to governmental curbs. “Then there is also the problem of the huge bar licence fee being collected from the hotels,” Dominic points out.
“The bar licence fee for a heritage hotel in Kerala is Rs 35 lakh, while it is just Rs 3.5 lakh in Rajasthan.”
Predeep adds more examples: “In Tamil Nadu, the fresh licence (FL) for the sale of beer and Indian-made Foreign Liquor (IMFL) – from 10am to midnight – on the premises of clubs, hotels and restaurants is Rs 6.3 lakh, while the licence for the sale of IMFL at clubs is Rs 10 lakh. They even issue 24-hour bar licences to the 5-star hotels at an additional cost.
“Look at Goa. We are losing many of our clients to the state. There, under the ease-of-doing-business policy, properties can avail licence for one, three and five years. There is no separate licence for beer and wine. There is also a facility to take temporary licences for specific events.”
Regarding rumours about standalone restaurants in tourism zones being allowed to sell beer and wine, Dominic says it would be “a good move”. “This would, in a way, promote our culinary strength and create a lot of job opportunities,” he adds.
Prashant, the former deputy director of Kerala Tourism, says such a provision already exists. “However, the lack of clarity on the boundaries of the so-called tourism zones led to confusion. Hence, the excise department turned down several applications seeking a beer and wine licences,” he notes.
“These establishments don’t need a licence for hard liquor; beer and wine would do. Foreigners don’t come here to guzzle hard liquor. All they want is a glass of beer or wine along with their food. It is their culture. What needs to be done first is to set the boundaries for the tourism zones.”
Another suggestion is to extend the proposed period for the beer and wine licence from September to March, instead of February. “Tourism season in Kerala is from September to March. In fact, March sees the highest beer sales in the state,” Prashant.
‘Promote arrack’
Notably, there has also been a long-time demand to open the liquor sector to private players. “If we can have private participation in the food and medicine industries, then why not liquor, too?” asks Dominic.
“In foreign countries, beer and wine are readily available in supermarkets and stores. The state government can set a fee for the sale.”
Dominic highlights how Sri Lanka has been promoting its coconut arrack. “We, too, have our arrack. And it can be presented by adding homegrown spices,” he says.
“It’s pathetic that we are not exploring the possibilities. Instead, we are importing Indian Made Foreign Liquor made in other states.”
Heavy competition
Countries like Sri Lanka, Maldives, Dubai, Malaysia, Singapore, Vietnam, and Thailand have been eating into Kerala’s markets primary due to the hostile excise policies here, says Predeep. “Post-pandemic tourist arrivals in Kerala has been below expectations, especially when compared with nearby destinations. Hence, it is vital to redraw our excise policy,” he says.
A top official of the tourism department asserts that the new liquor policy will be a booster shot for Kerala’s tourism prospects. “We are expecting tourism to pick up – especially footfall from foreign countries – to reach pre-Covid levels this year. And a relaxed liquor policy will help us achieve that,” he says, requesting anonymity.
“Premium restaurants and homestays will be allowed to serve beer, wine, toddy, etc. However, considering the current social culture of Kerala, such licences may not be extended beyond the tourist season. The seasonal licence will be implemented on a pilot basis in destinations such as Fort Kochi, Varkala, and Kovalam.”
He adds that the draft policy includes proposals to lift the dry days on the first day of every month, and easing of time restrictions on bars.
Asked about probable changes in the liquor policy, Excise Minister M B Rajesh says, “Policy consultations will start only after the Election Commission’s Model Code of Conduct is lifted. Tourism will be an important focus of the policy.”
Something to cheer
Restaurants in tourist zones can apply for a three-month licence to sell wine and beer during the tourist season at a fee of Rs 1 lakh
Three-star resorts and restaurants will be allowed to sell toddy
Dry days on the first of every month to be lifted
Bar closure time might be extended beyond 11pm
Branding and marketing of toddy
Pubs in IT parks?
According to Infopark CEO Susanth Kurunthil, to attract talent and more businesses, Kerala needs a better social infrastructure. “And that is not just pubs alone. Better transportation, healthcare, and entertainment — which also involves pubs — should exist in tandem,” he says. “As the draft policy is not out yet, I would not like to comment on rumours about licences for pubs to function on IT park campuses.” Raneesh Ramachandran, former president of the all-Kerala techies’ collective Prathidhwani, says, unlike other states and countries, Kerala’s IT parks do not have ample avenues for leisure activities. “I worked in Mexico for over a year. There, it’s common to see pubs on IT park campuses. Every weekend, we go there to catch up with friends, listen to music, and dance. The idea is networking, mingling with friends, unwinding after a busy week... Such spaces in Kerala’s IT parks will help. This is one thing we lack when compared with, say Pune or Bengaluru,” he says.
