A predominant part of Kerala’s revenue comes from the sale of alcohol, but the State and society have an uneasy relationship with its tipplers
Kerala’s liquor sales policy — which at the best of times is bad — seems to have crossed the line. In its greed to generate much-needed revenue to run the state, the Pinarayi Vijayan-led Left Democratic Front (LDF) government seems to have hurt (not killed, at least not yet) its golden goose — the sale of alcohol. Exorbitant taxes and the increasing societal disdain for alcohol consumption seems to have taken things to a precipice.
Since March 24, when the national lockdown was announced, and until recently, alcohol vends across the state were shut. It was expected that once the Kerala State Beverages Corporation outlets or BEVCOs opened, there would be a rush. However, this rush is fast petering out. Either the average Keralite with a huge yen for drinking has lost that urge or is happy elsewhere.
There are various factors that have contributed to this lull in sales; some are, a flawed sales approach, social stigma, and, most importantly, high taxes.
The hassles of a flawed sales plan, based on the cumbersome BevQ App as the only way to buy liquor, has demolished the myth that liquor sale in Kerala needs rationing. The argument here seems to be that if the supply of subsidised food grains and oil through ration shops could be done without an e-pass, why have it for the sale of liquor?
Another factor is the stigma from the morality brigade striding social and political platforms, and, of course, faith groups.
The response from a good number of the 867 new retail outlets, 576 bar-attached hotels and 291 beer parlours, has been lukewarm, given the low sales figures and 10 percent margin charged by the State-owned Kerala State Beverages Corporation. The damage seems to have been done by further increasing the tax rate to an unrealistic 247 percent.
Adding serious insult to grievous injury has been the attitude of the police towards customers lining up to buy liquor. There have been several instances where BEVCO outlets have witnessed police ‘highhandedness’. Perhaps the sale of liquor is the only sector where customer experience, service and satisfaction is not a concern.
Clearly, there can be no argument over the financial muscle that this customer-base can flex. In 2018-19, the turnover from the sale of liquor in Kerala stood at over Rs 14,500 crore and the revenue earned by way of tax was in excess of Rs 12,400 crore.
Not many business world over can fetch these kinds of returns. Not even the central government, much demonised for hiking excise duty till it exceeded the basic product cost, can hold a candle to the current rate of tax for alcohol in Kerala. Kerala’s 247 percent tax is reminiscent of customs duty rates in the pre-liberalisation years.
Kerala, ruled for decades by the LDF and the Congress-led United Democratic Front (UDF), has improvised on Bruce Yandle’s economic theory of Bootleggers and Baptists to an art form of pristine purity. The concept puts focus on regulations that thrive on account of support from groups that seek to impose restrictions and those who stand to gain monetarily by undermining these regulations. Here the politicians make the play, pretending to keep both groups happy.
In Kerala, the LDF and the UDF have not only benefited from ostensibly appeasing both groups, but the government has taken over as the single-point distributor of liquor in Kerala. By this, it has usurped the role of bootlegger by devising newer ways to raise taxes on alcohol, and augment the largest and perennial tax base.
This duplicity is best evident in society’s reaction to the sale and consumption of alcohol. Religious groups, especially Christian clergy, which condemn the spirits in Kerala, do not seem to hold the same standards in, say, Goa. Similarly, the Congress, which has fought one too many assembly elections on the promise of banning the sale of alcohol, does not have such delusions in Punjab, where it is in power.
One of the reasons stated by the government for reopening liquor sales during a pandemic is that there could be multiple cases of suicide because of the non-availability of liquor. However, barring a few odd instances, there hasn’t been a spurt in such cases.
One reason being talked about is that over the past two months there has been a rise in the number of mini breweries at homes — many under the supervision of the women at home who detest the idea of their men splurging hard-earned money at BEVCO outlets. On a lighter note it is being said that the men are being brought under a regime of supervised drinking with the women of the house taking up quality and quantity control.
All this evidently shows Kerala’s uneasy relationship with its tipplers. The State heavily depends on them to generate revenue, but will treat them with disdain. This has led to the current state where the frenetic activity expected is missing. Bars are not entirely deserted, but sale volumes are low. However, hoteliers have not given up hope. Meanwhile, the jury is still out on whether or not home brews will change Kerala’s alcohol consumption model.Vinod Mathew is a senior journalist based in Kochi. Views are personal.