Beer cheers for blue-eyed firm

Rajesh N Singh / TNN / Nov 19, 2007, 01:46 IST

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Chilled beer is giving a kick to an officially favoured private company but has stopped fizzing for the state's exchequer.

LUCKNOW: Chilled beer is giving a kick to an officially favoured private company but has stopped fizzing for the state’s exchequer. The modified liquor policy is likely to prove a nightmare for the state’s excise collections. The Blue Water Industries Limited (BWIL), the merely Rs one crore capital company, however, has every reason to say Cheers for this huge money-spinner.
If sources in the excise department are to be believed, BWIL, the blue-eyed company of the state government, is set to pocket well over Rs 50 crore by conservative estimates through hike in prices effected in retail price of beer and liquor.
On June 14, 2007, a GO was issued following a cabinet decision amending the state liquor policy. It imposed a restriction on any hike in retail price of beer or Indian Made Foreign Liquor (IMFL) and also country liquor. This order was conveniently bypassed as a hike of Rs 5 per bottle of 650 ml beer was arbitrarily effected through an administrative order of the excise commissioner.
This hike in retail price was not shared with the whole-sellers or the retailers (TOI has in its possession copies of invoices) by the BWIL which obviously pocketed the profits. Similarly a hike of Rs 15 per 750 ml bottle was effected on select selling brands of IMFL. “This has been done by effecting a minor change in the name of the brands,” confided a senior excise official.

Taking into account the beer as well as IMFL sale figures of the previous fiscal, this hike means an additional profit of no less than Rs 50 crore, said an official of the excise department. “As there was hardly any reaction to the beer price hike, prices of the IMFL were also increased,” said the official.
Another facet of this new arrangement is the vanishing of a large number of liquor brands from the market. “The 90 ml bottles of almost all brands except that of AB Sugars - the distillery belonging to Ponty Chaddha - are not to be found. This amply indicates that the entire market has been monopolised by the BWIL to benefit a chosen few,” said the excise official.

Situation on the country-made liquor front is also anything but rosy from the government’s revenue point of view.
For the first time the BWIL has forced distilleries to confine their supplies to certain districts only. “This has happened for the first time as in the past distilleries were free to cater to the demand of the whole sellers,” the official pointed out. And to what extent this arrangement could dent the excise revenue, could be gauged from the fact that around 20 to 25% of licensed whole sellers are left with literally no business.
When contacted, excise commissioner Himanshu Kumar refused to make any comment on the hike effected in the retail price of beer and IMFL by saying that he was not competent to make any comment on government policy.
He, however, said that in the recent past this sort of a phenomenon was never witnessed but since the government has a control over country liquor only, its hands were tied. On the disappearance of majority of brands from the market, especially the 90 ml packs, the excise commissioner said, “we have received intelligence reports on this count. I am sending teams to verify this and submit a report.”

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