Impact of Kerala liquor policy on Russion tourist

Published on: 12 Feb, 2015
Published under: General Kerala News, Kerala Travel News

Many Russian tourists travelling to Kerala wonder why buying a bottle of whiskey or ordering a beer in a restaurant in the state is such an impossible chase.

Kerala made international headlines in August last year when the Oommen Chandy-led United Democratic Front government introduced a new liquor policy leading to the closure of 730 bars, barring a dozen of five-star outlets.

The Supreme Court later challenged the logic of prohibition. Many professional associations and social activists protested, and finally the policy was put on hold.

Naveen Raj, the owner of a restaurant in Varkala whose liquor license was not renewed, admits that he is losing on alcohol sales. However, he added that most of the tourists come for food while alcohol is a secondary interest. “But Russians are hard drinkers. If you go to a liquor shop in town, all Russians are standing there in a queue,” he says. “The number of Russians are increasing in Kerala, but most of them try to buy liquor on their own or ask their travel agents who live here all season long, rent properties and lease it to the tourists, to do that”.

Ramesh told that tourism, both foreign and domestic, was affected badly in the current tourism year. “Lots of conferences shifted from here to Goa and Bangalore. Speaking roughly, tourism was 50% low comparing to last year; one of the reasons is that Kerala was marketed as a dry state even by the travel agents”, he added.

The sales of liquor in Kerala have been under control of the government-owned Kerala State Beverages Corporation Limited (BEVCO) for three decades, and all its 338 retail shops look alike: a metal grill separating the seller and customers and long queues outside the shop.

Liquor is a highly taxed commodity in Kerala, with 100% excise duty, KSBC margin, sales tax, and turnover tax and service tax. The total tax burden comes to about 350-400%, which accounts for high prices. Liquor sales contribute more than 23 per cent to the state’s revenue. The ADIC-India study revealed that Kerala’s revenue from alcohol increased from US$ 6.5 million in FY 1987-88 to US$ 1.2 billion in FY 2013-14.


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