Today's Paper

Govt. takes over retail liquor trade

CHENNAI OCT. 26. In an attempt at ending cartelisation in liquor trade, the State Government has decided to take over retail vending.

Announcing the decision, the Government, in a press release said, "the TASMAC (Tamil Nadu State Marketing Corporation) and its agency, namely cooperatives alone, will hereafter undertake retail trade.

The Government has, therefore, promulgated an Ordinance amending the Tamil Nadu Prohibition Act, 1937 (Tamil Nadu Act X of 1937) to achieve the above purpose."

The Government said it "decided that firm steps should be taken to put down the cartels, which have seriously affected the retail trade of Indian-Made Foreign Spirit."

Because of malpractices by the cartels, the State lost revenue.

Despite the State-owned TASMAC handling the wholesale trade, "private retailers of IMFS have been indulging in malpractices in its sale. There have also been violations of the maximum retail price by private retailers." Accusing the retailers of acting "against the interest of consumers," the release said, "very often, their unfair trade practices have posed serious public health hazards." Recalling the genesis of the problem and the initiatives taken by the State Government, the release said that from 2001-2002, the Government introduced the lots system as a salutary method to end the malpractices.

The lots system was expected to prevent cartelisation, which greatly affected the earlier auction system. Despite the introduction of the lots system, the cartels ensured that a sizable number of shops remained unlicensed in 2002-2003. The intention of the groups was to control the retail market and cause loss of revenue to the Government.

The fact that a number of persons withdrew after getting allotment of shops and sought refund clearly indicated that cartelisation had not been eliminated. This also affected the IMFS sales. In order to prevent continued sale of spurious and contraband liquor and taking note of the adverse effects of cartelisation and cornering of shops, as well as other irregularities such as violation of the maximum retail price fixed by the Government, it announced a new system of selection of applicants based on merit for the excise year 2003-2004 for grant of privilege to run retail shops. This was to be done by constituting district-level selection committees, which were to scrutinise applications. Also, as a "specific measure to break cartels," the Government "prescribed that only one licence be given to an applicant."

"Despite the fact that a large number of persons purchased application forms, only a few completed applications had been received by the last date," (October 13).

Cartels at work

The Government then extended the last date to October 22, but it did not have the desired effect. "Organised groups among existing licensees are operating to bring to naught government's effort to put an end to cartelisation and bring in fair competition.

The Government is also concerned that the cartels are once again at work, trying to ensure that a large number of shops remains unsold, so that they can corner the retail trade," it said.

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