Demonetisation: In Kerala's 'Battle of Queues', bottle holding its ground against bank

Thiruvananthapuram: In Kerala's Battle of the Queues, the bottle seems to be holding its ground against the bank. Scenes of parallel queues outside liquor shops and ATM kiosks have prompted the question: has demonetisation failed to take the brio out of the booze in the state? Official data show that liquor sales did dip after demonetisation but bounced back within three to four days.

Eventually, Kerala swigged Rs 1,013 crore worth of Indian Made Foreign Liquor (IMFL), beer and wine in November, Rs 62 crore more than the corresponding period last year.

Queues outside a Bevco outlet. Photo: The Telegraph Calcutta

The outstanding feature of the trend is that all of it was bought with paper money amid the nationwide cash crunch. None of Kerala's 300-odd liquor outlets offers the card payment option - the archaic Abkari Act that the state still follows insists on cash payments for liquor.

The 6.5 per cent rise in revenues implies a rise in the volume consumed too, since liquor prices have increased by just about 4 per cent. For instance, the Kerala State Beverages Corporation Ltd (Bevco), that state's largest hard liquor retailer, sold 15.70 lakh cases of IMFL and wine in November against 15.08 lakh cases in the same month last year. Liquor sales contribute about 22 per cent of Kerala's total government revenues, with IMFL dominating the sales. Kerala has only two hard liquor retailers: Bevco, which has 270 shops, and The Kerala State Cooperative Consumers Federation Ltd (Consumerfed), which has 36. There are three beer shops too under Consumerfed. Bevco notched sales of Rs 901 crore in November, a rise of Rs 59 crore from the same month last year, while Consumerfed's returns stood at Rs 112 crore, up from Rs 109 crore. Bevco's sales had fallen on November 9, the day demonetisation came into effect, slipping to Rs 18 crore compared with Rs 26 crore on the same day last year.

An ATM kiosk in Thiruvananthapuram. Photo: The Telegraph Calcutta

By November 12, however, the sales had touched Rs 27 crore, outstripping the Rs 23 crore recorded on November 12 last year.

Where did the tipplers find the money? A house painter in Vattiyoorkkavu, Thiruvananthapuram, provided one answer. He and his team of three painters had gone without work for 14 days after demonetisation as a homeowner who had hired them could not find the cash to pay them. That didn't put the quartet off the bottle, though. "We used some of our savings to buy liquor. Earlier, we used to share a one-litre bottle every day but after the note ban, we switched to a 750ml bottle or sometimes just a 500ml one," the painter said. Bevco MD H. Venkatesh told The Telegraph ; "if we compare (November 2016 sales) to the previous month (October) of this year, it is less. But if we compare (November 2016 sales) to previous year (November 2015), then it is more. If we compare to October of this year (2016)...it was something like more than Rs 1000 crores (in October). So that's where demonetisation affected (the sales).'' Bevco had recorded sales of Rs 1,170 crore in October this year. Consumerfed MD M Ramanunny attributed the rise in the Rs 3 crore revenue of the Federation to the increase in liquor prices. The volume sold had come down over the previous months, he argued. But some officials in the know of the liquor trade disagree with the methodology: "Comparing data from two different months is not the way to analyse the sales, because different months may have different numbers of holidays, etc, which can influence the sales. So, the figures for a month must be compared with those from the same month the previous year." Sociologist L. Thara Bhai said the figures showed that demonetisation had not had any psychological impact on the drinkers. "Those used to drinking will somehow find the money. But if the sales have increased, then it's worrisome," she said. In 2014, the then Congress-led United Democratic Front government had changed the state's liquor policy with the goal of imposing prohibition in a phased manner. It outlawed bars in hotels below five star and decided to shut down 10 per cent of the liquor outlets every year on Gandhi Jayanti, October 2. Sixty-eight Bevco and eight Consumerfed outlets were closed over the next two years. But the CPM-led Left Democratic Front, which came to power in May this year, decided against closing any more retail outlets. The ban on hard liquor sales in hotels below five star has boosted beer consumption across the state, with the 400 bars attached to the smaller hotels being shut or converted into wine or beer parlours. In the 2015-16 financial year, beer sales shot up by 61 per cent to reach 95.59 lakh cases. This fiscal year, the figure has risen further to 99.63 lakh cases within the first eight months (till November 30). Bevco's revenues for the 2015-16 fiscal amounted to Rs 11,577 crore and Consumerfed's to Rs 1,363 crore. -The Telegraph Calcutta