Southern States - Tamil Nadu

Costlier liquor in old bottle

By Suresh Nambath

CHENNAI June 4. The 100-ml cheap liquor might have gone out of market but 100-ml bottles are staging a comeback in their earlier `avatar' to serve low-end consumers.

Having withdrawn the 100-ml bottles following the introduction of cheap liquor in bottles of the same capacity, the Tamil Nadu Government is facing revenue loss after the stoppage of cheap liquor. In the absence of 100-ml bottles in the market, there is now a decline in the offtake as the low-end consumers are left with only high-cost 180-ml bottles.

As the low-end consumers find the 180-ml bottles ``unaffordable'', the 100-ml bottles are being reintroduced in the market. At present, liquor shops are selling liquor `loose' to cater for the low-end consumers who contribute significantly to the revenue. Although `loose' sale remains illegal, the Government realises there is no other alternative till the reintroduction of the 100-ml bottles.

In March this year, when cheap liquor was still in the market, 16.09 lakh cases were sold including 5 lakh cases of cheap liquor. This brought Rs. 97.73 crores in excise revenue and Rs. 154 crores in sales tax.

In May, after the withdrawal of cheap liquor, 11.31 lakh cases were sold, bringing Rs. 98.73 crores in excise revenue and Rs. 142.51 crores in sales tax.

In such a scenario, the 100-ml bottles have earned their right to return to the market. This, it is believed, will offset the loss in anticipated revenue.

After the introduction of cheap liquor, the Government, after posting a growth of 8.4 per cent, showed a reduction in revenue of Rs.25.84 crores in January, Rs.27.44 crores in February and Rs.14.29 crores in March.

However, the sale of 100-ml cheap liquor was on the rise in all the three months. From, 4,82,928 cases in January, the number went up to 6,97,253 in February and 8,90,124 in March. Though this should have actually brought in more revenue, the increase was at the cost of the high-cost ordinary brands.

The original 100-ml bottles were withdrawn with the introduction of cheap liquor as it did not make marketing sense to have high-price 100-ml bottles along with cheap 100-ml bottles. Now, with the elimination of cheap liquor, the market once again feels the gap for the 100-ml bottles, say officials.

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