The State Government on Monday issued show-cause notices to five liquor companies as to why their label licences should not be cancelled in connection with the dispute over offer price. They have been directed to reply by April 25.
The Government issued notices acting on the recommendation of the Odisha State Beverages Corporation (OSBC). Moreover, the Excise Commissioner has written to the Excise Secretary for cancellation of manufacturing licences of two companies.
Notably, the OSBC, the State-run wholesale distributor of beer and Indian Made Foreign liquor (IMFl), had urged the State Government on Friday last to cancel the licences of five breweries, Carlsberg, United Breweries ltd, SABMiller India, MP Beer Products ltd and Devans Breweries ltd who between them control about 70 per cent of the beer trade in the State. These five breweries have failed to sign the agreement for supply of beer for 2015-16.
The corporation had moved the Government for cancellation of factory licences and label registration of breweries run by these five companies, which are opposed to the reduction in offer price of beer to the extent of 20 per cent in the new excise policy of the State.
The Government has claimed that excise revenue collection has been affected as the companies are supplying beer without signing the pact. With this, the revenue has dipped 86 per cent since the start of this financial year, sources said. As per the new excise policy, the State Government has reduced the offer price of beer companies by 20 per cent and that of IMFl by 10 percent.
Notably, before the expiry of the deadline to sign pact with the Government, as many as 31 IMFl and seven beer companies signed agreements with the corporation.