United Spirits’ second oldest unit in Bihar loses fizz in liquor ban
The ban on consumption and sale of alcohol in Bihar has forced the second-oldest liquor unit of United Spirits in the country, located at Hathidah in Mokama — some 60km west of the state capital — to stop production.india Updated: May 10, 2016 12:00 IST
The ban on consumption and sale of alcohol in Bihar has forced the second-oldest liquor unit of United Spirits in the country, located at Hathidah in Mokama — some 60km west of the state capital — to stop production.
The unit was established by Vittal Mallya, father of troubled liquor baron Vijay Mallya, who now holds only 4% stake in United Spirits after its takeover by Diageo.
For the management, however, the state government’s policies have rendered the unit unfavourable for production.
“The Hathidah unit was fondly termed the ‘golden bird’ of United Breweries Group by Mallya senior for its fine blend. This was due to the water quality that sent the McDowell brand soaring high on popularity charts,” recalled Daljit Singh, a liquor trader.
It survived the impact of the first prohibition introduced in 1977. But the unit, which employs over 600 regular and contract employees, does not think it will be lucky again despite having a valid licence for production in 2016-17. The state governmentexpandedtheambitof the ban on country and spiced liquor fromApril1toincludeIndian-made foreign liquor (IMFL) on April 5.
A company executive said, “What will we do with the licence whentheyhavecancelled19C—the permit for supplying to the Bihar State Beverages Corporation?”
“The government assured us it would waive off export pass fee on IMFL. But it has allowed the concession for the export of extra neutral alcohol (ENA) and ethanol only. How can exports be a remunerative proposition if we have to pay export pass fee and import pass fee in respective states?” he asked. “Moreover, all neighbouring destinations have their own bottling or manufacturing units to cater to local demand,” he added.
With an impending layoff, the employees’ union has stepped up its demand for favourable compensation package.