Bar hotels, and beer and wine parlours in the State will down shutters for an indefinite period from Monday to protest against the "arbitrary decision" of the Kerala State Beverages Corporation (Bevco) to steeply hike its wholesale profit margin from 8% to 25%.
Bar owners association representative Biju Ramesh said the Corporation's offhand decision had further disadvantaged the hospitality sector already laid low by successive COVID-19 lockdowns.
The government has allowed bars to sell liquor as a takeaway at an MRP rate from June 17. However, the purchase rate of alcohol for bars was higher than the MRP. Hence, bars have to sell liquor at loss or risk prosecution under the packaged commodity rules.
“The bar purchase rate of the lowest priced rum is around ₹611 for a one-litre bottle. However, its MRP is fixed at ₹600,” he said.
Another bar owner said Bevco buys the rum for ₹53.3 a litre. “It sells the liquor to bars at a wholesale price of ₹600, including tax and profit. It is the ordinary buyer who picks up the unjustifiably high tab for cheap liquor finally,” he said.
The government had earlier included 28% of the Bevco profit margin in excise duty to avoid huge IT payments. It had charged a token 8% as wholesale margin. Now, the Corporation has hiked the margin by 17% without consulting stakeholders.
The difference between the price on the MRP label and that charged by bars had resulted in quarrels between sellers and customers. The Excise Department has now mandated that bars display the stock and price list prominently near sales counters.
Officials said Bevco decision was aimed at driving business to State-run outlets to replenish the public coffer. It had earlier argued against bars to reopen at the current stage of the pandemic. However, Excise Minister M.V. Govindan had shot down the proposal to prevent buyers from swamping liquor outlets and allow the hotel sector to open up cautiously.
The closure of bars would also throw hundreds of persons out of work.
Hotels had recalled cashiers and counter staff who were out of work and on unemployment dole for long. It could also cause long queues in front of liquor outers. Kerala has 730 odd bar hotels.
