The retailers of Indian Made Liquor (CL2 licensees) are demanding that they be given a higher commission than the current 20 per cent margin that they get from the maximum retail price.

After the arrack ban in Karnataka on July 1, 2007, the Excise department has been flooded with cases of gross violations of the MRP on IML, especially the lower segment liquor.

The cheapest liquor, for Rs 27 (for a quarter bottle) is reportedly being sold between Rs 35 and Rs 40 across the State, especially in the villages.

The department is aware of the MRP racket but is unable to book cases as implementation of the MRP is looked after by the Department of Weights and Measures.

Varied reasons

The reasons for such offense are varied. “The previous government banned arrack without doing any homework. There were arrack shops in the villages but after the ban, the arrack consumers are left high and dry. They have to either travel to the district headquarter for liquor or buy it locally at whatever price. The demand is pushing the illegal sale of liquor, including duplicate liquor.

People buy the cheap segment IML in bulk and sell it at a much higher price in the villages,” said the officer.
Another officer pointed out that last year, the JD(S)-BJP coalition government in their Budget doubled the license fee with the result that the retailers started feeling the pinch. “The CL2 licensees in the districts don’t earn that much but have to pay the same fee. Apart from the fee hike, the costs of labour, transport etc have also gone up. This is obviously leading to a lot of resentment among the small retailers. The 20 per cent commission was declared in 2003,” he said.

20 per cent margin

The IML retailers get 20 per cent margin on the MRP. “They are asking for a higher revision on the commission,” said a Karnataka State Beverages Corporation Limited spokesperson. The Excise department early this week had a meeting with the retailers and industry representatives and they all demanded a better margin.
“Though we feel 20 per cent is good enough, we may propose another five per cent hike on the MRP for the retailers, to the government,” said an officer.

“Besides improving on the commission, government should issue fresh licenses for CL2, CL9 (pubs and bars) to curb the illegal price hike on IML,” he added.

BAN A BOON

Though the Government is not issuing any fresh licenses to IML retailers, pubs and bars, there’s no restriction on the manufacturers or distilleries. Cashing in on the demand for cheap liquor, two new distilleries are coming up in the State, in Gokak and Athani in Belgaum district. One of them is being set up by Jarkiholi and family and the other by Farmers’ Co-operative Society.

The arrack ban has indirectly boosted excise revenue by increased sale of IML. “In comparison to January last year, the department made a 72 per cent profit in January this year,” said an Excise officer.