Bars are back

In Kozhikode, the crowd before a Bevco outlet following the Supreme Court order directing closure of bars and liquor retail outlets within 500 metres of highways.

THE wheel has turned full circle again in Kerala with the State government’s decision to roll back the liquor policy of the previous United Democratic Front (UDF) administration, which aimed at introducing total prohibition in the State in stages within a decade from 2014.

As part of the policy, the UDF had closed down 712 foreign liquor bars run by private hoteliers in August 2014, in addition to 10 per cent (or 78) of the total retail outlets of the State Beverages Corporation, or Bevco, which runs all liquor retail shops in Kerala and controls wholesale liquor sale to bars. It allowed bars to continue to function only in five-star hotels (about 20). Each year thereafter, it had said, 10 per cent more of the Bevco outlets would be shut down.

The Left Democratic Front (LDF) government, which just completed a year in office, has termed it an impractical policy and decided to allow all hotels in and above the “three star” category to run bars. This should mean the reopening of the 712 bars that had been shut down in what was seen as an impulsive act by the then Chief Minister, Oommen Chandy, amidst intense political rivalry within the Congress party and its ruling coalition (“Old wine, new bottle”, Frontline, September 3, 2014)

The LDF says it believes that the only way to help people kick the habit is through awareness campaigns that can help them get rid of their craving gradually, and not through prohibition. Therefore, it believes “in making liquor available till then under stringent norms”.

Other highlights of the new policy are as follows: (a) licences, including those for beer/wine parlours, given under the foreign liquor rules, will continue to be granted to all legally eligible applicants; (b) restaurants that have the necessary licence will be allowed to serve IMFL or beer/wine in their banquet halls if they remit a prescribed fee; (c) all liquor (including beer and wine) outlets located within 500 metres of State and national highways (which were shut down following the recent Supreme Court order) would be allowed to relocate to a suitable place within the same taluk on condition that the workers who lost jobs when the outlets had to close down are re-employed; (d) international and domestic airport lounges would also be allowed to serve foreign liquor.

The government has also decided to raise the minimum age limit for consuming liquor from 21 to 23 and retain the three-litre limit for the maximum quantity of foreign liquor a person can purchase from retail outlets. The working hours of bars have been cut by half an hour a day to 12 hours (from 11 a.m. to 11 p.m). In the outlets catering to the tourism sector, the timings would be from 10 a.m. to 11 p.m.

The licence fee for bars has been increased to Rs.28,000 from Rs.23,000 and for retail liquor outlets run by Bevco and Consumerfed to Rs.4 lakh from Rs.3 lakh. There is no change in licence fee for most other outlets, including clubs, beer/wine parlours, beer retail outlets, pubs, military clubs and canteens.

The new policy document approved by the State Cabinet on June 8 said that reducing the availability of liquor without bringing down the craving for it among people had led to the spread of illicit liquor and narcotic and psychotropic drugs, as was evident from the “phenomenal increase in Excise cases” in the State following the closure of bars in 2014.

While 12,904 Abkari cases and 847 NDPS (Narcotic Drugs and Psychotropic Substances) cases were registered during 2013-2014, the numbers rose to 25,332 and 3,835 respectively in 2016-17. “This shows that as long as the craving for liquor exists in society, total prohibition would remain an impractical task,” it said.

It also claimed that the closure of 712 bars and 78 retail outlets by the UDF government had not helped much in bringing down liquor consumption, with merely a 7 per cent drop in IMFL sales alone being registered in “2015-16 as compared to the figure in 2010-11”. During the same period, there was an 80 per cent rise in the sale of beer. So, it said, “if combined consumption of IMFL and beer is considered, there has only been a net increase in liquor consumption”.

The policy document said the UDF’s Abkari policy had created a serious crisis in the tourism industry, a major revenue earner for Kerala, with tourist arrivals falling from 8.1 per cent to 7.06 per cent after it became operational. In the same period, tourist arrivals in India as a whole had risen from 5.9 per cent to 10.2 per cent. MICE (Meetings, Incentives, Conferences, Conventions, Exhibitions and Events) Tourism, which registered a growth rate of 9.1 per cent in 2013, fell to 4.8 per cent in 2014 and was a mere 0.6 per cent in 2015.

As the Frontline Cover Story in the April 15, 2015, issue explained, the UDF’s unlikely war on alcohol was more a result of political circumstances than one of sound deliberation. However, those who question the new LDF policy’s rationale, including leaders of the UDF and the influential Kerala Catholic Bishops’ Council, say that contrary to the ruling Front’s claims, the impact of the curbs imposed by the earlier government had actually proved beneficial for the State.

For example, they say, though the number of Excise cases registered went up in the past two years, the quantity of illicit liquor and narcotic substances seized in Excise raids actually went down. Similarly, though the consumption of beer and wine did increase in the State, the total volume of liquor sales went down by 7.47 per cent, unlike claims to the contrary made by the government.

Moreover, the number of tourists coming to Kerala and the total revenue from the tourism industry actually went up as per the figures of the Tourism Department itself, unlike what is claimed by the LDF in the policy document, they said.

In sum, the LDF has removed all curbs on the legal sale of liquor in Kerala, including the ban on issuing fresh bar licences imposed in 2011 and the requirement that new liquor outlets could only be launched with the permission of the local body concerned.

It is well known that liquor is a commodity that is taxed heavily and it is the State government that gains the most from the legal sale of liquor. According to an estimate, before 2014, 23 per cent of the State’s revenue came from the sale of liquor. For example, the revenue from alcohol stood at Rs.10,615 crore in 2014-15, up from Rs.40.74 crore in 1987-88. Unrecorded sale and consumption is believed to be double the recorded figure.

It is yet to be known how much revenue the new policy would bring additionally to the State. The cash-strapped State stands to gain much from the LDF policy.

But the real impact of the new policy will be understood only when benefits in terms of revenue, its effects on the tourism industry and the creation and sustenance of jobs are balanced against the ill effects that the free availability of liquor will have on a society where alcohol consumption is one of the highest in India.

R. Krishnakumar