The high prices of liquor in Kerala have pushed many locals and tourists to seek cheaper options in neighboring states, but during the festive season, Keralites defied the costs, celebrating with enthusiasm. As the state continues to enforce strict regulations on alcohol sales, the disparity with other states remains a topic of debate.
BY PC bureau
Liquor worth Rs. 152.06 crore was sold out in Kerala during this Christmas season, which is 24.5 per cent more than the sale during Christmas last year.
The state government charges a prohibitive 247% sales tax on liquor, which makes liquor prices much higher in the state compared to other parts of the country.
According to the Kerala State Beverages Corporation (KSBC), which is the sole liquor distributor in the state, the total liquor sold during December 24 and 25 in 2023, the total liquor sale Kerala was worth Rs 122.14 core, which has now increased by …
KSBC sources point out that there was no price hike in liquor during the last one year. Hence the increase in the sales turnover will have a corresponding increase in the quantity of liquor sold during this Christmas season.
Of the sale worth Rs 152.06 crore, liquor worth Rs 126.04 crore was sold out through the ‘Bevco’ retail outlets of the KSBC, and the rest was sold out through the warehouses. The state will be having considerable increase in the liquor sale in the coming days also in view of the New Year celebrations. The total tax and duties on liquor in Kerala comes to around 250 per cent.
In response to the festive demand, the Kerala Excise Department has implemented special measures to manage the increased flow of intoxicants. A special enforcement drive was launched to curb the production and transportation of illicit alcohol, as well as the smuggling of alcohol and drugs from other states. This drive, which continues until January 4, includes checks at inter-state borders, surveillance of labor camps, and monitoring of tourist vehicles to prevent the smuggling of contraband.
High Liquor Prices in Kerala: A Comparison with Other States
Kerala, known for its scenic landscapes and rich cultural heritage, is also home to some of the highest liquor prices in India. Despite being a popular tourist destination, the cost of alcohol in Kerala stands out as notably higher when compared to other states across the country. The primary reason for these elevated prices lies in the state’s taxation system, stringent alcohol control policies, and the overall regulatory framework that governs the sale of liquor.
Taxation and Excise Duty
One of the main drivers behind the high liquor prices in Kerala is the state’s excise tax system. Kerala has one of the highest excise duties on alcohol in India, which significantly raises the price of liquor. The Kerala State Beverages Corporation (Bevco), which controls the retail sale of alcohol in the state, has imposed taxes that range from 100% to 200% of the base price of liquor, depending on the category of alcohol. This steep tax burden increases the retail cost for consumers.
In contrast, states like Rajasthan, Goa, and Maharashtra have lower excise duties on alcohol, which makes liquor more affordable in these regions. In Goa, for example, the excise duty on alcohol is comparatively lower, and the cost of alcohol is a fraction of what it is in Kerala. This disparity has led to the phenomenon of tourists crossing state borders to purchase cheaper alcohol, especially from neighboring Tamil Nadu and Karnataka.
Government-Controlled Liquor Sale
In Kerala, the sale of liquor is tightly controlled by the state government. Most liquor sales are handled by Bevco, which operates a monopoly over the retail outlets. This centralized distribution system not only contributes to higher prices due to administrative costs but also limits the availability of cheaper options. Other states, such as Tamil Nadu and Maharashtra, have a more competitive market, with both state-run and private outlets selling alcohol, leading to more competitive pricing.
Moreover, Kerala’s policy of restricting liquor sales to government-run outlets creates a situation where prices are higher due to the lack of competition. States like Goa and Rajasthan have a more liberal approach, with many private establishments selling liquor at competitive rates.
Demand-Supply Imbalance and Smuggling
The demand for alcohol in Kerala is consistently high, especially during festival seasons and holidays, contributing to inflated prices. Additionally, the state’s prohibition-like laws and strict regulations have encouraged the illegal smuggling of alcohol into the state, further disrupting the market. While the government has implemented measures to curb this illicit trade, it is still an issue that adds to the overall pricing imbalance.
States like Uttar Pradesh and Bihar, which also have strict alcohol regulations, have faced similar issues of illegal liquor sales and smuggling. However, Kerala’s strict control and high taxes have only compounded the situation, leading to even higher prices for consumers.
Impact on Consumers and Tourism
The high prices of liquor in Kerala have a direct impact on consumers, particularly locals. Many residents opt to buy alcohol from neighboring states, where prices are significantly lower. This pricing disparity also affects the tourism sector, with visitors seeking more affordable options in states like Goa, where liquor is cheaper. However, on Christmas Day, Keralites seemed undeterred by the prohibitive prices. They celebrated the holiday in full spirit, enjoying themselves with drinks and dance, proving that the festive season was a time for joy and revelry, regardless of the cost.
