The Uttarakhand government was left blushing after the high court indirectly asked it to provide a level-playing field to the Indian-made foreign liquor (IMFL) brands which alleged business losses due to a restrictive liquor policy.
The state government had announced the new liquor policy in April 2015 which carried some changes in the purchase procedure. On November 26, United Spirits Ltd and Pernord Ricard India Pvt Ltd, which showcase 32 brands, moved the high court through former union minister and lawyer P Chidambaram, alleging that the policy complexities had hit the brand sales by 60% in one year.
Their major objection was the three-tier purchase clearance system which allegedly gave them little business room in the state.
On December 23, justice UC Dhyani directed additional excise commissioner (licensing) and district collectors to fix the minimum stocks (brand-wise) of Indian made foreign liquor (IMFL) on the basis of the orders placed by the retailers.
However, the court order is being seen as an embarrassment for the Congress-led government it in a way exposed the inherent bias in the new policy and the issue was strongly contested for the foreign brand firms in the court by none other than a senior Congress leader, feel party insiders.
Meanwhile, the Confederation of Indian Alcoholic Beverage Companies (CIABC), a parent body of liquor manufacturers in the country, has expressed happiness over the court’s decision.
“We feel the government will respect the court’s decision and provide a level- playing field for all,” said CIABC director general Pramod Krishna. As per the new policy, the excise department grants liquor permits.
The liquor procurement is looked after by the Uttarakhand Agricultural Produce Marketing Board and its distribution by the Garhwal Mandal Vikas Nigam and the Kumaon Mandal Vikas Nigam.
There have been allegations that the new policy had given a lot of ground for corrupt play in the form of popular brands being sidelined and unknown liquor brands being introduced for obvious reasons. In fact, liquor retailers across the state too hold a similar view.
The state government has fixed a target of earning Rs 1800 crore from the liquor trade in the current financial year.
However, the departmental sources say they are Rs 200 crore behind the target. Commissioner (excise) BK Sant only said that there was nothing wrong in the policy.
For decades, liquor had been a debatable subject in the hills. Several women groups had for long demanded prohibition of liquor.
However, the government held a different view as the state largely earned from the tourism industry and a prohibition threatened to hit the revenue gains, sources said.
In July this year, the Rawat government was hit hard after a video footage allegedly showed former secretary to chief minister Md Shahid seeking money from a party for wholesale liquor business in the state. The video triggered a bitter war between the state government and the BJP. Finally, the chief minister sent the officer back to the department he came from.