The ongoing tussle between the Odisha State Beverages Corporation (OSBC), the Government-run wholesale distributor of beer and India Made Foreign liquor (IMFl) in the State and breweries manufacturing top beer brands over the offer price has led to an acute shortage of the frothy drink, especially during its peak demand in the summer season.
While the Government is silent after constituting a committee headed by the Development Commissioner to look into the issue, manufacturers of top beer brands are adamant in their resolve not to reduce their offer price by 20 per cent as demanded by the Government knowing it very well that the local brands will not be able to meet supplies as per demands. The Government has announced a new excise policy for the 2015-16 fiscal which has come into effect from April 1. As per the new arrangement, top beer manufacturers will be required to supply beer to the OSBC at rates 20 per cent less than that of the previous fiscal.
The Government’s logic behind such a decision is the super profits earned by the beer manufacturing companies. The 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, according to liquor manufacturers, it is the Government which determines the rates and it was getting its share accordingly. They say they are unable to make out on what basis the Government decided for supply of liquor to the OSBC at a 20-per cent less price. They say this would cause huge financial losses to them, for which they are delaying inking of an agreement with the OSBC. Retailers say they are getting only 20 per cent of their requirement of liquor now. Even local brands are not available in plenty though those don’t have that much of demand, they say. The crisis has affected the tourism industry while the Government has lost lakhs in terms of revenue.
Excise Minister Damodar Rout told the media on Sunday that the Development Commissioner-headed committee would resolve the issue within a couple of days through negotiations; otherwise, efforts would be made to meet the demand by enhancing production of the State’s local brands. What is, however, not known is how such a huge market for beer will be taken care of with local brands which hardly constitute a 10-per cent share of the total market.