BENGALURU: Karnataka is facing a shortage of Indian Made Liquor (IML). According to sources in the liquor and hospitality industry, the state may run out of IML if the reported stalemate between the distillers and the Excise Department on filing Ex Distillery Price (EDP), as per the new government notification, is not resolved at the earliest.
In the wake of the stalemate, the distillers have not been able to indent their alcohol to Karnataka State Beverages Corporation Limited (KSBCL), which channelises and distributes duty paid liquor to excise licencees in the state.
“This week, the distillers had no transaction with KSBCL because we are unable to file the EDP or the new declared price as per the notification issued on August 23. The Excise Department is not allowing us to do so,” claimed sources in the industry.
“The loss to the state exchequer in the absence of any sale to KSBCL may be around Rs 110 crore and Rs 120 crore per day. Besides, if the deadlock continues, the IML stocks in the state will deplete further,” sources said.
The distillers met excise officials on Wednesday and appealed to them to approve their new declared prices as per the new notification. “We have asked for an early resolution. There was some positive response, but we have to wait and watch,” said industry insiders.
Meanwhile, sources in the government said that they intend to resolve the ‘crisis’ at the earliest, but it may take at least a week to stabilise the IML inventory. The delay is reportedly being attributed to the scheduled three-day visit of Arvind Panagariya led 16th Finance Commission team to the state from August 29, on which the state machinery is focussed.
‘Running out of big brands’
“The IML companies have slowed their indenting since the issuance of the draft notification on the proposed cut in Additional Excise Duty (AED) on IML in higher slabs in June. They have been indenting only what they are confident to sell because no one wants to pay higher AED. They have been waiting for the notification on rationalisation of AED, which was expected on July 1, but was delayed. Nobody wants to stock up,” the sources said.
Some leading liquor retailers (CL2) in the city said that their IML stocks have gone down to 30%. “We are running out of popular brands of alcohol and are forced to push other IML brands to customers,” said one of them.
The government issued two notifications on August 23 about rationalisation of AED on IML slabs in higher segments for retailers and on minimum declared price for distillers below which they are not allowed to invoice. The 18 excise slabs of IML have been brought down to 16. The notification, however, has not mentioned the MRP of alcohol brands.
BEER TO COST MORE?
In a move to increase revenue, the government is likely to increase the AED on craft and draught beer from 150% per bulk litre (pbl) to 185 pc pbl, the sources said. “Beer will be divided into three segments depending upon the percentage of alcohol (v/v). Stronger beer will be priced higher than mild and medium beers,” the sources said.