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Print edition : Aug 04, 2022 T+T-

Booze bumps: Time to turn around TASMAC from its terrible mess

Inside the bar attached to a Chennai TASMAC outlet during a busy evening in July.

Inside the bar attached to a Chennai TASMAC outlet during a busy evening in July. | Photo Credit: B. JOTHI RAMALINGAM

Tamil Nadu should take steps to restore dignity to both workers and customers in its liquor trade.

Tamil Nadu has a unique and disturbing relationship with alcohol. Under prohibition for many decades, until the 1970s when the policy was revoked, its liquor policy has been marked by ambivalence. Both the DMK and the AIADMK, the two parties to rule the State since 1967, have phenomenally enlarged the scope of the business while crying hoarse about the “evils of alcohol”.

Today, the State leads in alcohol consumption, accounting for 13 per cent of total alcohol consumption in the country (according to a Crisil study).

TASMAC sells 1,60,000 cases of IMFL (Indian Made Foreign Liquor) and 90,000 cases of beer a day.
TASMAC sells 1,60,000 cases of IMFL (Indian Made Foreign Liquor) and 90,000 cases of beer a day. | Photo Credit: BIJOY GHOSH

All liquor sales are controlled by The Tamil Nadu State Marketing Corporation or TASMAC, which sells 1,60,000 cases of IMFL and 90,000 cases of beer a day. (IMFL, or Indian Made Foreign Liquor, is a catch-all term used for all hard alcohol such as whisky, brandy, rum, gin and vodka.)

The moral confusion has meant that even as alcoholism is a major social problem, the conditions in which alcohol is sold and consumed at the government-controlled outlets are squalid, affording no dignity either to customers or staff.

The confusion seems to clear up when the annual sales and revenue figures arrive: they break records every year. Yet, the workers remain poorly paid, the outlets shoddy, and the quality of alcohol is bad.

While holding a government job is usually a matter of prestige in India, TASMAC workers face abysmal working conditions at the outlets and contempt and ridicule at home.

History of liquor policy

The State was under total prohibition until 1971, when the DMK government led by M. Karunanidhi allowed the sale of arrack and toddy. But in 1974, it banned their sale. In the 1980s, the AIADMK government led by M.G. Ramachandran lifted prohibition and reintroduced the sale of arrack and toddy.

Former Tamil Nadu Chief Minister J. Jayalalithaa. In 2003, the AIADMK government took over the retail sale of liquor. The rationale offered was that it helped break the syndicate of private players, which she said had caused heavy losses to the exchequer.
Former Tamil Nadu Chief Minister J. Jayalalithaa. In 2003, the AIADMK government took over the retail sale of liquor. The rationale offered was that it helped break the syndicate of private players, which she said had caused heavy losses to the exchequer. | Photo Credit: SUBRAMANIUM S

Soon, the State government also assumed the role of manufacturer and seller of IMFL. It established TASMAC in 1983, primarily to eradicate the menace of illicit liquor. In later years, the company procured IMFL wholesale from different distilleries and breweries, which it then sold to outlets auctioned to private players.

In 2003, the AIADMK government led by Jayalalithaa took over the retail sale of liquor too, and the system continues to date.

Jayalalithaa’s rationale in taking over the retail trade was that it helped break the syndicate of private players, which she said had caused heavy losses to the exchequer. The government as the sole agency empowered to procure, distribute and vend liquor in wholesale and retail earned a revenue of Rs.3,639 crore that year.

The cash cow

Since then TASMAC’s income has grown manifold, in recent years at 6-9 per cent every year, turning it into the cash cow it is today. It is widely believed that the State government depends on this revenue to bankroll its social welfare schemes.

In the 2021-22 financial year, TASMAC’s revenue touched Rs.36,013.14 crore, an increase of 6 per cent over Rs.33,811.15 crore earned in 2020-21. Sources said the annual turnover could increase to Rs.40,000 crore from next year on account of a hike in excise duty on liquor.

As of March 2022, TASMAC had 6,715 shop supervisors, 15,000 salesmen and 3,090 assistant salesmen on its rolls, compared to its 2016 strength of 7,204 shop supervisors, 15,677 salesmen and 3,753 assistant salesmen.

TASMAC today runs 5,380 retail outlets and 3,240 bars, and sells some 541 brands of spirits, beer and wine.

Despite the considerable size of its operations and despite raking in the moolah, TASMAC’s 25,000-odd employees are a neglected lot, who claim that their salaries are much below what is paid to an average government employee. This has, in turn, created a dark underbelly of corruption and crime that everyone is aware of but no one is willing to tackle.

When the government took over the liquor trade, it initially opened 6,800 outlets across the State and recruited nearly 30,000 sales personnel on contract on consolidated monthly wages. These employees were appointed directly by the respective District Collectors through employment exchanges apparently on the promise that their jobs would be regularised and they would draw proper salaries. As a result, many young men, graduates, post-graduates and even engineering graduates lined up for the vacancies.

Customers thronging a TASMAC outlet in Chennai on April 15, 2019.
Customers thronging a TASMAC outlet in Chennai on April 15, 2019. | Photo Credit: B. JOTHI RAMALINGAM

The State, however, has failed to keep its promise, even though more than two decades have elapsed. K. Thiruselvan, general secretary of the CPI (M)’s Tasmac Oozhiyar Maanila Sammelanam (TUMS), said: “The sales employees are drawing measly consolidated wages and remain temporary workers.” With the government silent on their demands, the employees have resorted to mass protests and agitations, such as a one-day Statewide strike in 2010 and a massive rally in Chennai on April 24, 2013, attended by their wives and children. Instead of addressing their grievances, the government has tried to mollify them with consolidated annual hikes of about Rs.500 every now and then.

In 2016, the AIADMK government announced a token monthly hike in the wages of supervisors, salesmen and assistant salesmen, of Rs.500, Rs.400, and Rs.300 respectively. At that time, a supervisor was drawing Rs.7,000 a month, while salesmen and assistant salesmen earned Rs.5,200 and Rs.3,900 respectively.

Woeful work conditions

Wages have risen 15 times in the past 20 years but have not been standardised. An employee who earned Rs.2,000 a month in 2003 earns Rs.11,500 today. “These annual consolidated hikes are poor compared to the pay scales of employees in other government departments,” said Muthu, a salesman for 16 years at a liquor outlet in Salem and also a trade union member.

Although TASMAC workers have been getting mandated benefits under The Minimum Wages Act, such as provident fund contributions and gratuity, they have not been brought under the purview of the Tamil Nadu Shops and Establishments Act, 1947, which guarantees fixed working hours, holidays, off days, overtime, holiday wages, and basic amenities inside a shop.

At a protest by TASMAC employees in Chennai on February 2, 2021.
At a protest by TASMAC employees in Chennai on February 2, 2021. | Photo Credit: JOTHI RAMALINGAM B

“We work for a minimum of 12 hours a day at a stretch in subhuman conditions. We do not even have toilets. The shops are like cages and they stink. Weekly offs are a luxury. We have no service registers. Even a minor discrepancy in sales leads to suspension and sacking,” said a TASMAC employee in Chennai’s busy Kodambakkam neighbourhood.

The government also uses a target-oriented sales strategy, which the workers dislike. They say that sales in outlets vary based on the location and social class of the clientele, and that being penalised for not meeting targets is unfair.

Rampant corruption

Given the low salaries and dismal working conditions, it is no surprise that corruption and malpractices are rampant in the outlets. The sales staff engage in various illegal activities, such as overcharging customers, faulty billing, and dilution of alcohol. A common way to make money on the side is by selling “cuttings”, slang for liquor sold by the peg rather than in sealed bottles.

The salesman in Kodambakkam said that “cutting” sales was particularly rampant in outlets with attached bars and in outlets located in remote places. Opening the seal could and does lead to adulteration and dilution, and TASMAC officials are aware that the practice exists. An official, who spoke to Frontline on condition of anonymity, said, “Sometimes salesmen deliberately break open premium brands and sell it by the peg.”

Selling above the maximum retail price (MRP) is also rampant. A frequent customer of a busy outlet in Chennai’s Mandaveli locality told Frontline that he regularly pays Rs.5 to Rs.20 over MRP per bottle, depending on size. Beer is sold at Rs.10 over MRP. “A chilled bottle costs more,” he said.

The official agreed that this was a serious menace. “We are taking steps to prevent it,” he said. “The government fines salesmen Rs.1,000 for every rupee collected in excess. Disciplinary action is also initiated.”

People outside a TASMAC outlet. The sales staff have accused the TASMAC management of forcing them to push unfamiliar brands.
People outside a TASMAC outlet. The sales staff have accused the TASMAC management of forcing them to push unfamiliar brands. | Photo Credit: JOTHI RAMALINGAM B

However, the sales staff accused the TASMAC management of forcing them to push unfamiliar brands. “Sought-after brands are tucked away in a corner and little-known brands are forced on customers,” said the supervisor of a shop near Koyambedu in Chennai.

The extent of corruption in these outlets can be gauged from several incidents where the Directorate of Vigilance and Anti-Corruption wing has seized huge amounts of unaccounted cash, Rs.60,000 to Rs.3 lakh, from TASMAC shops across the State. In one instance, during the inspection of an outlet in Thoothukudi, TASMAC officials found a staggering shortage of Rs.3 crore from its four-month revenue.

“Those who are found to have committed fraud are being booked under the Prevention of Corruption Act,” a DVAC officer said, adding that those who work in the company’s “Elite” outlets also engage in such malpractices.

People purchase liquor from an Elite TASMAC shop in Chennai.
People purchase liquor from an Elite TASMAC shop in Chennai. | Photo Credit: VEDHAN M

Thiruselvan claimed that many “Elite” shops, usually located in malls, were sub-leased from a third party to avoid directly entering into rental pacts with mall managements. Big money is involved in these transactions. Besides, “one has to pay a bribe to get posted in such shops where the daily sales is Rs.6-10 lakh,” said Thiruselvan. The salesman at a Chennai outlet that registers sales of Rs.10 lakh a day, told Frontline that he paid a Rs.25 lakh bribe to a politician for his posting. “We have no option but to sell above the MRP; it is part of our instructions,” he said.

The additional income from malpractices nets sales personnel Rs.25,000-50,000 a month today in addition to wages. In the high-end outlets, earnings are higher.

Another fallout of the unorganised way in which the TASMAC business is run is the unholy alliance between workers and liquor cartels. “Many employees have been sucked into a vortex of crime and malpractice. The government, the Ministers, irrespective of political affiliations, are all well aware of it,” said Muthu.

United in spirit

In many ways, TASMAC has been a great unifier. There has never been any confrontation, either politically or in principle, between the AIADMK and the DMK as far as alcohol sales are concerned. Both have adopted the same stand on retaining the existing vending system, which is porous and allows for ample manipulation. It is in everyone’s interest to keep the employees underpaid so that they can participate in the venality. A combination of corruption, administrative neglect, lack of quality control, and the government’s lackadaisical approach has ensured that the State’s liquor trade is harmful in every way except for the huge revenues it brings in.

Most sources that Frontline spoke to said that while the employees’ demands had to be addressed sympathetically, the fact remains that about 40 per cent of them no longer rely on the wages the government gives; many, in fact, own swanky houses and expensive assets. “A situation has arisen where employees are no longer enthusiastic about participating in protests or agitations,” said Thiruselvan. “Very few turn up. But nearly 50 per cent of them continue to suffer; it is for them that we work.”

A few former TASMAC employees are MLAs today, belonging to either the DMK or the AIADMK. The wife of a shop supervisor is the mayor of the town where the shop is located, having contested on the DMK ticket. Her husband continues in his supervisor job at the TASMAC shop, earning his consolidated wages.

In 2017, media reports said that a test conducted by a State-run food safety lab on a bottle of rum purchased from a TASMAC outlet in Chennai showed that it was of substandard quality and contained more than double the prescribed limit of tartaric acid.

The food safety department closed the issue by stating that the outlet was shut down, and no action was taken against the manufacturer.

In July 2015, the Madras High Court directed TASMAC officials to conduct quality checks on the liquor marketed by them after a petitioner alleged that the liquor TASMAC sold had toxic substances.
In July 2015, the Madras High Court directed TASMAC officials to conduct quality checks on the liquor marketed by them after a petitioner alleged that the liquor TASMAC sold had toxic substances. | Photo Credit: PICHUMANI K

In July 2015, the Madras High Court directed TASMAC officials to conduct quality checks on the liquor marketed by them after a petitioner alleged that the liquor TASMAC sold had toxic substances.

Illegal trade practices have almost been normalised across the State. “The customers have resigned themselves. Many customers who frequent the outlets are habitual drinkers. The State, instead of sanitising TASMAC’s functioning, chooses to remain silent. Industry watchers point out that it is high time Tamil Nadu adopted a foolproof system like the one that prevails in neighbouring Kerala,” said Thiruselvan.

The Kerala story

The liquor trade in Kerala is also fully controlled by the government, which runs the outlets through Kerala State Beverages Corporation (Bevco), the TASMAC counterpart. However, unlike Tamil Nadu, liquor sales are properly accounted for, and purchases can be made only against bills. The staff are regular employees who receive government-mandated salaries, hikes, and bonuses.

From 2018 onwards, Bevco has been hiring women for accounting positions at its retail outlets.
From 2018 onwards, Bevco has been hiring women for accounting positions at its retail outlets. | Photo Credit: The Hindu Photo Archives

In fact, from 2018 onwards, Bevco has been hiring women for accounting positions at its retail outlets, an indicator of how well and safely the system functions.

TASMAC sources told Frontline that the government is well aware of the difference in Tamil Nadu. A high-level discussion was held recently in which it was decided to consider employee demands. As a major chunk of the workforce is retiring soon, it was also decided to professionalise the recruitment process and align it with other services in the government, a policy decision the government has yet to formalise.

V. Senthil Balaji, Minister for Electricity, Prohibition, and Excise in Tamil Nadu.
V. Senthil Balaji, Minister for Electricity, Prohibition, and Excise in Tamil Nadu. | Photo Credit: Siva Saravanan S.

In April this year, V. Senthil Balaji, Minister for Electricity, Prohibition, and Excise in the DMK government, while speaking in the Assembly, announced a wage hike of Rs.500 a month for all TASMAC employees. He said it would put an additional financial burden of Rs.16.67 crore on the government.

He also said that the government had earmarked Rs.4 crore for awareness campaigns on the harmful effects of alcohol.

The minister announced that in 2021, a total of 7.76 lakh litres of illicit arrack were seized and destroyed besides 1.16 lakh litres of rectified spirit and 25.74 lakh of IMFL bottles, all of which had been smuggled in from neighbouring States. He further claimed that a system had been evolved to prevent the sale of spurious liquor, but there is no information on how that works.

TASMAC outlets today source liquor from 11 IMFL manufacturing units, 7 beer breweries, and 1 winery. Many of these, however, are owned by politicians belonging to both the ruling party and the opposition.

It is this potent cocktail of politics and money that propels the liquor trade in the State. Plugging the leaks, ensuring decent living wages for employees, and high quality standards of the products sold can actually amplify earnings and restore dignity to workers and customers. But does the State government have the political will to do so?