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Delhi Wine Club

Posted: Thursday, 29 July 2010 14:03

Chennai May Regress into Prohibition

Although it sounds like political rhetoric, the Tamil Nadu Chief Minister M Karunanidhi voiced in a surprise statement yesterday the possibility of re-imposition of total prohibition in the state. The DMK leader was reacting to the demand by PMK founder Dr S Ramadoss to close down liquor shops and impose total prohibition in the state.

He said the state government was considering imposing total prohibition again and would soon take a ''good decision'' on this. He is otherwise known to be of the opinion that prohibition would be fine for his state provided it is imposed throughout the country.
He said his government would not only consider Dr Ramadoss’s request to regularize the services of TASMAC employees, but would also consider his long-pending demand for imposing total prohibition in the state. Ramadoss has demanded that the government should consent to the demands put forth by TASMAC employees. Recently, Ramadoss had made it clear that he was not in a hurry to take a decision on renewing ties with the DMK, for fighting the next assembly elections jointly.

On the other hand the Tamil Nadu Toddy Movement is threatening to intensify its agitation for lifting the ban on toddy sale. They argue that the government is being partial to the Indian Made Foreign Liquor (IMFL) by allowing their sale through TASMAC shops but denying permission for toddy sale. Toddy is extracted from coconut or palm trees and makes a low alcohol drink which has been banned in TN since 1987.

Though seemingly a politically attractive decision, It may not be economically feasible with the Excise and Sales Tax revenues generated by the state monopoly TASMAC, through liquor sales being around Rs 125 billion in the fiscal 2010 according to its website. The IMFL production stood at 11.5 million cases in 1995-96 and was reported at 41 million cases last year. Also, the sale of beer rose to over 24 million cases from 9.5 million in 1995-96 according to reports.

DMK had earlier turned down Ramadoss' persistent demand for prohibition regime, reportedly saying it would open the doors for illicit arrack, Karunanidhi had ordered reducing working hours of state-run TASMAC liquor retail outlets last year following a request

This is not the first time the topic of prohibition has been raised though. Ramadoss and other leaders from various NGOs and religious organisations had called on Karunanidhi in December, 2008 to demand implementation of total prohibition and close down all TASMAC shops within a month. The CM had then assured them that no new TASMAC shop would be opened and steps would taken to implement prohibition

The State of Tamilnadu has a long history of prohibition. It was first implemented in 1937 and finally lifted in 2001. During this period it was lifted briefly during 1971-74, 1981–87 and 1990-91. TASMAC was formed in 1983 to be in charge of wholesale liquor sales in the state whenever prohibition was lifted. TASMAC became the wholesale monopoly for alcohol in 2001. For retail sales licenses were auctioned off to manage liquor shops and bars. But this led to the formation of cartels and loss of revenue to the state. The government introduced a lottery system from the financial year 2001-02.But it could still not prevent cartelization, as bidders would withdrew in favour of others.

In October 2003, the government passed an amendment to the Tamil Nadu Prohibition Act, 1937, making TASMAC the sole retail vendor of alcohol in the state. By 2004 all private outlets selling alcohol were either shut down or taken over by the company. Today, it has around 36,000 employees and a significant revenue earner for the state.

Despite of TASMAC being the sales monopoly, the laws framed by the Excise department are independently framed. For instance, till a year ago the alcoholic beverages bottled in the state only were allowed to be retailed (and we consider Maharashtra and Karnataka to be grossly unfair to the out of state imports!). Under pressure from WTO and a visit by the delegation a couple of years, the state relented somewhat and agreed to allow sale though taxes have been kept prohibitive. 11 retails shops have been selected to sell Indian and imported wines. Unfortunately, they are not temperature controlled and turn into roadside open taverns where people buy, drink and get drunk, making it impossible to buy wine-even if it the decent variety were available.

How will it affect them if the prohibition is imposed eventually, I ask Mr. D.K Raju CEO of Wine Legends based in Chennai. His hearty one-minute laugh, longer than the after-taste of even the best of wines he imports, tells me everything. ‘But seriously, it won’t affect out hotel and club business because they would be exempt. The only tragedy would be that we are creating a lot of awareness through proper education to try to shift the people from liquor to wine by sales through the retail counters. That part of the business will suffer, I am afraid.’

So is the wine business-selling to hotels and clubs should be a cakewalk for the Chennai based company. ‘Far from it,’ he says in exasperation. ‘We have been trying to get the department to give us permission to sell. But they have some strange law that even I don’t understand fully, which says that Chennai based companies cannot sell in Chennai.’ Strange as it sounds, perhaps it puts prohibitive tax for intra-city sale. Anyhow, he has given up the battle and has opened an office in Pondicherri and stocks are being shifted too so that the orders can be executed. He has also been negotiating with TASMAC and is about to make a breakthrough. “But I have selected two shops where I will supply and we shall give them wine chillers. Our team would get the orders from our database and online portal. We will send our person to pick up the product and deliver after we get a confirmed order. It may not sound very modern or efficient but beats closing shop.

People like Wine Legends might suffer but would prohibition mean that no wines would be available. Far from it, perhaps the availability may increase though prices would go higher, says a wine lover who refuses to be named. Bootlegging is rampant in Chennai. One can walk over to Burma Bazaar, ‘the smuggler’s market’ near High Court and pick up as many wine labels as possible. Pondicherry and Bangalore seem to be the resources.

Prohibition would only mean increased  revenues unofficially.

DelWine tried to contact Chinmaya Arjun Raja who has been promoting wine in Chennai for the last few years. He could not be reached as he is ‘in Bangalore to organise the wine sessions and wondering when Chennai will become wine friendly like start with,’ according to his comment on the Facebook. Well, if Mr. Karunanidhi has his way, Raja will have a palatable option- shift to Bangalore.

Curiously, the TASMAC (Tamilnadu State Marketing Corporation Ltd.) website lists 5 low end table and fortified ‘port’ wines against 129 labels of liquor including India bottled 5 scotch whiskeys and 27 varieties of beer. Two of the five wines are Riviera table wine from Indage and perhaps not available if one goes by the financial problems of the company, unless they are getting it bottled nearby.

Unless better quality wines including Indian labels are made available more openly and freely, maybe it is time that the state should enforce prohibition!!



Sidd Says:

Either be like Gujarat (No drinks at all) or be like the majority of Indian states (Drink whatever u want) but dnt be like TN (drink...but wat the government tell u to drink) sucks

Posted @ August 23, 2010 10:46


paul Says:

The Tasmac shops are Pathetic, Filthy & Stink with Urine from Drunk men. If you walk into a wine shop at Bangalore its a heaven for a drinker. You can see so many brands available and lots to choose from including wine and foreign beers like Budweiser, Carlsberg & Tugo. Beer cans are also available and you get all the brands. In chennai its pathetic, you cannot get a chilled beer anywhere , not even a beer can, The only brand that decent is KF. What is the govt doing about this,Once they took over things have become worse.

Posted @ September 03, 2010 16:52


Kumar Says:

It is good to close the Wineshops and make wines to be sold in Big Retail shops like Bigbazaar or Reliance MArts where Anybody more than 21 years can buy with proper ID Proof. Also it is good to allow TODDY... GOD MADE LIQOUR...really good for health it is got directly from Palm and Coconut Trees.

Posted @ August 02, 2010 10:46


dkraju Says:

Contradictions galore in liquor distribution policies of TN. Chennai is on the way to be a major business hub in India with a lot of international players having already opened their work shops and many expatriates residing, no government can ill afford to ignore income generation from liquor sale.

Posted @ July 30, 2010 13:57


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