Has the money from real estate which is down in the dumps since the demonetisation of Rs 500 and Rs 1,000 notes made its way into liquor business?
This is the big question on the minds of Excise officials who are under increasing pressure from distillery owners to be allowed to step up their production to meet the demand for Indian Made Foreign Liquor (IMFL) which has registered a steep hike in the last one week since the announcement by Narendra Modi.
On Tuesday, the volume of sales were worth Rs 53 crore, a 28 per cent growth, over this day last year which the liquor dealers body attributed to anxiety of dealers to build up buffer stock. The sales were initially down to Rs 22 crore and Rs 20 crore on November 9 and 10 respectively from Rs 45 crore on November 8 when Modi’s announcement came as ATMs were closed on the two days. But, they shot up to Rs 68 crore and Rs 74 crore on the two subsequent days when the shopkeepers insisted the consumers to round off their purchases for the full volume of Rs 500 and Rs 1,000 notes.
President of Telangana Wine Dealers Association D. Venkateswara Rao said the high denomination notes were refused in the retail market since November 13 (Sunday) which actually led to a 40 per cent dip in business. He countered the argument of excise officials about real estate dealers pumping money into liquor business wondering if the dealers will be allowed to go scot free without explaining the source to the Income-Tax department.
However, senior excise officials have said that the department was under pressure from the 18 distilleries in Telangana to be allowed to step up production. The annual production capacity of the distilleries was 311.68 lakh cases (each case is 9 litres of IMFL) and that of 5 breweries 5,050 bulk litres.
The Telangana government has barred import of IMFL brands, over 1,000 plus, from other States in a bid to earn more revenue and generate employment. This has forced the distilleries to make their own arrangements to meet the local demand. Most of the brands are in the middle range and very few in the low end as they are not profitable because the government has insisted manufacture with extra neutral alcohol (ENA). Rectified spirit based cheap liquor was profitable to distilleries but it was stopped by the government.
