Odisha beer crisis to stay as HC defers hearing to May 12

Odisha Sun Times Bureau
Cuttack, May 6:

The acute shortage of beer in the state is set to continue for at least another week after the Odisha High Court today postponed the hearing on the case filed by five major beer manufacturing companies challenging the government’s new Excise policy seeking to reduce the offer price of beer by 20% to May 12.

Excise Minister Damodar Rout had told the media on Tuesday that the government was waiting for the outcome of the hearing at the High Court’s on Wednesday and had hinted that if required the government may make changes in the Excise policy.

While the Excise department is willing to reduce the offer price to 10% instead of the 20% it had sought in accordance with the 2015-16 Excise policy, the dispute remains unresolved as beer makers have demanded it in writing.

“We offered to reduce the offer price from 20% to 10%. But they want it in writing, which we cannot give. We will make alternate arrangements after going through the High Court’s decision at tomorrow’s hearing. If it’s required, some changes will be made,” Excise Minister Damodar Rout had said on Tuesday.

While the deadlock between the state government and beer manufacturers continues, acute shortage of the frothy beverage in the market has deprived tipplers of their favorite brew this summer.

The Odisha State Beverages Corporation (OSBC), the state-run wholesale distributor of beer and Indian Made Foreign Liquor (IMFL) in the state, has failed to supply even 19% of the cases supplied to retailers in April last year.

According to available information, OSBC had supplied 12.49 lakh cases of beer to licensed retailers in the state during the month of April last year. During the same period this year, the OSBC has been able to supply only 2.35 lakh cases. Similarly, the corporation had done a meagre business of Rs 11.93 crore compared to Rs 37.41 crore during April last year.

Meanwhile, licensed liquor retailers of the state, who met the OSBC managing director on Monday, told him that while the corporation is unable to meet the supply, they have to pay the license fee. Demanding that OSBC should compensate them for their losses, they said they would have no option but to shut down their outlets if supplies are not normalized soon.

The new excise policy provides for procurement of top beer brands at 20% less. Opposing the new excise policy of the state government, five major beer manufacturing companies – SABMiller India, Carlsberg India, United Breweries (UB), MP Beer Products and Devans Breweries – have stopped supplies to the OSBC and have not entered into agreement with it for supplying beer. The five manufacturers who refused to sign the agreement, it may be noted, control 80% of the beer market in the state.

Offer price is the rate at which they supply the beverage to OSBC.

The government has served show-cause notices to the five beer makers threatening cancellation of their label registration and has asked district collectors of Jagatsingpur and Khurda to cancel brewery licences of SABMIller and UB, which have plants in the two districts.

The state has stopped receiving stocks from the companies at old prices, resulting in short supply and price rise by 30 to 50%.

It may be mentioned here that talks between the beer manufacturers with the development commissioner and the Excise commissioner for a resolution of the impasse had failed.