Odisha in grip of acute beer crisis

Odisha Sun Times Bureau
Bhubaneswar, Apr 27:

The ongoing tussle between the Odisha State Beverages Corporation (OSBC)-the state-run wholesale distributor of beer and Indian Made Foreign Liquor (IMFL) in the state and breweries manufacturing top beer brands over the offer price has lead to an acute crisis of the frothy drink that has left throats of its guzzlers’ dry-summer being the peak demand period.

While the state government has been sitting tight over the issue by constituting a committee headed by the development commissioner to look into the matter, manufacturers of top beer brands are adamant in their resolve not to reduce their offer price by 20% as demanded by the state government knowing it very well that the local brands will not be able to meet supplies as per demands.

Sources said the state government has announced new excise policy for the state for the 2015-16 fiscal and it has come into force from April 1. As per the new arrangement top beer manufacturers will be required to supply beer to the OSBC at rates 20% less than that of the previous fiscal.

The state government’s logic behind such decision is the super profits earned by the beer manufacturing companies. The state government is of the view that profit margins to liquor retailers (shop owners) on each brand of liquor have been fixed and no extra profits should be given to the retailers but then companies were offering extra discounts to the retailers in the past years over and above their profit margin which is questionable. So efforts are on to fetch this amount for the state exchequer. The government is of the opinion that the measure would curb sales of beer.

However, liquor manufacturers tell that it’s the government which determines the rates and it was getting its share accordingly. They said they are unable to make out on what basis the government decided for supply of liquor to OSBC by the manufacturers at 20% less prices. Manufacturing companies said this would cause huge financial losses to them and for that reason they are delaying inking of the agreement with the OSBC.

The tussle between the manufacturers and the government has resulted in unavailability of top brand beers.

“We are getting only 20% of our requirement of liquor,” said a liquor retailer.

“Even local brands are not available in plenty though those don’t have that much of demand among the tipplers,” the retailer added.

The crisis has affected tourism industry while the state government has lost lakhs in terms of revenue.

“A committee has been constituted with the development commissioner as its chairman to solve the dispute arising out of the profit sharing issue. The committee will resolve the issue within a day or two through negotiations. Otherwise efforts will be made to meet the demand by enhancing production of the state’s local brands,” said Damodar Rout Minister Excise speaking to the media here on Sunday.

What is worrying is how such huge market for beer will be controlled with local brands which hardly constitute only 5 to 10 percent share of the frothy beverages’ total market in the state.

Retailers feel with the row continuing spurious stuff could enter the market endangering lives.