Alcoholic beverage body urges Meghalaya govt to scrap 'Central Bonded Warehouse'

The Confederation of Indian Alcoholic Beverage Companies (CIABC), the apex body of the Indian Alcoholic Beverage Industry, has written to the Meghalaya Government seeking an immediate end to the creation of Central Bonded Warehouse (CBW) which is to function as the sole wholesaler for all alcoholic beverages products to be sold in Meghalaya.

In its letter to Sarika Aggarwal Synrem, Commissioner & Secretary, Excise Registration Taxation Stamps (ERTS) Department, a copy of which has also been sent to Meghalaya Chief Minister Mr Conrad K Sangma, the CIABC has urged to “put implementation of the CBW on hold until the time its commercial rationale and legality is validated”.

Stating that the Meghalaya Government has neither consulted stakeholders including the CIABC before introducing the CBW nor has it has given reasons that warrant the introduction of this CBW in the supply chain, CIABC Secretary General Vinod Giri said: “CBW is an additional layer added in the distribution chain which will add to the cost of operation in the state. Current market structure is working fine without glitches and it is very unclear what purpose will CBW serve.”

“It is commonly held principle that an additional cost must deliver additional benefit and the additional cost must be borne by the party which gets additional benefits. Therefore, if the CBW is being created by the Government for its own benefit, then its margin should come out of government revenues. Alternatively, if it is being introduced for a benefit to the consumers, then this cost should be passed on to the consumers,” the CIABC said in its letter to the Meghalaya Government.

Pointing out that the CBW was created in a very arbitrary manner, Giri said creation of the single point wholesaling entity for the entire state would lead to creation of a privately held monopoly.