The Hindu Business Line : Kerala Govt urged to frame clear-cut policy on imported liquor

DIAGEO India Pvt Ltd, the Indian subsidiary of global liquor major Diageo, has requested the State Government to introduce a policy exclusively for the sale of imported liquor brands in the State.

In the absence of a clear-cut policy on imported liquor — also called bottled in origin (BIO) liquor — premium liquor brands are only available in the grey market in Kerala, said Mr Rajeeb Mallick, Director-Corporate Affairs, Diageo India Pvt Ltd.

This situation results in very high prices for the consumer and the threat of spurious liquor, he pointed out. At the same time, the State Government also loses out on revenues because of the grey market.

According to industry estimates, 20,000 cases of imported liquor are consumed in Kerala every year, mainly through the grey market.

If the State Government introduces a BIO policy, about 80 per cent of the grey market is expected to switch to authorised liquor retailers as premium brands will become more affordable, Mr Mallick said.

This is expected to generate additional tax revenue of over Rs 1 crore for the State Government.

In New Delhi, for instance, the introduction of a BIO policy in November 2004 helped push up tax collections, he pointed out.

A BIO policy for Kerala will also aid the State's tourism sector by ensuring that premium international liquor brands are available at affordable prices, Mr Mallick said.

Companies such as Diageo that own well-known liquor brands are concerned at the possibilities of brand erosion due to the flourishing grey market in Kerala. A clear-cut BIO policy will help end concerns about brand erosion, he added.

Besides Diageo India, other international liquor companies under the aegis of the International Spirits and Wine Association of India are also working to persuade the Government of Kerala to introduce a BIO policy.

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