Tamil Nadu high on Diwali liquor sales despite claims of outlet closures

The ongoing investigations by various agencies suggest profit margins for liquor retailers in Delhi may have increased as much as ten-fold | Photo: PTI

The Tamil Nadu State Marketing Corporation (Tasmac), which runs retail liquor outlets and has monopoly over Indian Made Foreign Liquor (IMFL) sales in the state, earned nearly ₹450 crore this Diwali season, much beyond its last year’s earnings of ₹325 crore. This comes despite the state government’s claim that it is in the process of shutting down several outlets in the state in a step-by-step manner.

Activists claim that the state has witnessed a rise in alcohol consumption since the Tasmac was given the rights for retail IMFL sale in 2003. It may be recalled that during a debate in the Assembly a couple of years ago, it was stated that about 61.4% of the state’s population depend on Tasmacs for buying alcohol.

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As per the annual Tasmac data, the revenue rate since 2003 has always shown an upward trend and the earnings during 2018-19 touched a whopping ₹31,157 crore. During the year-ago period, the same was about ₹26,797 crore. Moreover, it may be noted that during festive seasons like Diwali and Pongal, the sales record a much higher figure in comparison to that during other ordinary days.


‘Setting targets leads to high sales’

Activist Ranga Prasad, joint secretary of Satta Panchayat Iyakkam, blamed the state government’s ‘target setting’ trend for being one of the major reasons behind this surge in revenue.

“In 2015, due to the efforts of Gandhian activist Sasi Perumal, the then state government led by J Jayalalithaa had considered dry laws in the state. The assembly elections were also around the corner at that time,” he said. He added that when Jayalalithaa was the chief minister of Tamil Nadu, Tasmac’s revenue recorded only a marginal increase every year and it was only after her death that the dispensation resorted to setting targets for every retain outlet.

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In 1937, Congress leader Rajaji had advocated prohibition and organised demonstrations in Salem, Prasad said, adding that it is an irony that incumbent Chief Minister Edappadi K Palaniswami, who also hails from Salem, went on help increase the Tasmac revenue.

“At present, the Tasmac functions at three levels. At the top level, distillery owners control the market, while at the middle level, the bar contractors help attract more consumers. At the lower level, the snacks suppliers try to get a foothold. Until these three are regulated, we cannot prevent alcohol addiction in the state,” he said.

Meanwhile, the surge in liquor sales came as a surprise for many since the state government has been claiming that it is in the process of shutting down several retail outlets. This claim has been turned down by activists like Aruldoss, who alleged that even Jayalalithaa’s 2016 promise of shutting down 500 outlets was only an oral assurance and that there was no written order regarding the same.

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“The state government had claimed that it shut down retail outlets located on national and state highways in accordance with the Supreme Court’s order. However, in reality, none of the shops were shut. All such shops downed their front shutters and continued business through their back gates,” claimed Aruldoss, one of the convenors of the ‘People’s Movement Against Liquor and Drugs’.

However, KP Ramu, deputy general secretary, Tasmac employees’ association, defended the government’s claims on the closure of outlets, saying that it had shut about 2,000 shops of the total 6,000.

“The government did follow the top court’s order. The sales increased only due to the issue of alcohol addiction in the state. The price hike of alcoholic beverages also does not affect the revenue surge,” he said, adding that even if price hike affected revenue, the difference will not be more than ₹50,000. He also pointed out that a year ago, the government had increased beer prices by ₹10.

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Meanwhile, activist Prasad quoted a World Health Organisation (WHO) report as saying that accessibility and availability are the two factors that induces the consumption of alcohol. “If the government reduces the number of shops and increases the price, it might help prevent cases of alcohol addiction,” he said.

Another festive element that runs parallel to Tasmac sales during Diwali is the ‘Diwali Fund’, a sort of chit fund system run by individuals who are mostly the proprietors of the retain outlets. These individuals collect a monthly amount from interested customers for a year and in return, provide them with alcohol, snacks, and even paper cups during Diwali. Many of the consumers feel that such funds reduce their burden during the festive time.

M Chellapandian, president, Tamil Nadu Liquor Consumers Awareness Association, said that such funds lead to corruption and that the state government is overlooking this issue. “According to Government Order 444, issued in 1993, such Diwali funds must be stopped by the village administrative officers and the police,” he said.

Further, he alleged that the products sold by Tasmac lack in quality. “For a long time we have been trying to bring liquor items under the Food Safety and Standards Act, 2006,” he added.