India: Beer set to come back to Bengal before summer

After being exiled from the shelves due to a hike in excise duty, coupled with bottlenecks in the supply chain, beer is set to make a comeback in Bengal. But sipping on the popular summer beverage could leave thirsty Bengalis high and dry on account of the revised prices, The Hindu reported on April 3.

The production and distribution of beer in Bengal is back on track after a gap of three months owing to a hike in excise duty. The State government issued a communiqué to this effect saying that beer will be back on the shelves of liquor stores with all the key breweries in the state upping production.

“In order to cater to the demand of beer in the summer season, all the three breweries are now functioning in three shifts, optimizing their production capacity,” the release noted. The problem of non-availability of beer started following a sharp hike in excise duty. Following the hike, beer producers stopped production and the much desired summer drink disappeared from the market.

According to the communiqué, United Breweries and Carlsberg India “now produce 30,000 cases per day”, while Celebrity Brewery is producing about 12,000 cases, thus going full capacity, the communiqué noted.

“We have fixed the price in such a way that it is less than what it is in other States - like Maharastra - where the prices are around Rs.155. Here it will be around Rs.140. The producers are satisfied with the settlement and have gone to production,” a senior State Government official said. In the main retail outlet in the city’s central area in Esplanade, the price of a 650ml bottle of Tuborg has gone up from Rs.110 to Rs.145. Beer contributes around 10% of the total excise revenue collected in the State, and 95% of the beer consumed in the State is of “strong” variety with 8% alcohol content, official estimates noted.

But in many of the retail outlets, and the pubs or bars in the city, beer is yet to arrive. The reason, according to Smarajit Mitra, Chairman, Banking and Finance, of the Merchants’ Chamber of Commerce and Industry, is that the prices are up in bars or clubs by a whopping 50%.

“The [liquor] license fee has gone up from Rs.50,000 to Rs.5 lakh per year. In addition to the 30% to 35% direct increase, the cost has to be apportioned through sales pushing the charges up above 50% amount,” said Mr Mitra. The State Government official said that if the clubs file an official complaint to reduce the license “it could be considered.” Mr Mitra, however, said that the hike may “encourage illegal entry of beer” from other States to West Bengal.

The other problem is logistical. The supply chain of liquor in the State has also been altered causing distribution to take a hit. Previously, liquor was sent to a “super distributor” by the suppliers who own breweries and distilleries in the State. Following a recent order by the State government, alcoholic beverages are now moved from the site of production to warehouses of the State Beverages Corporation, thereby creating logistical clogs. Government officials, however, denied the allegations.

“Retailers book the consignment on the net and the warehouse delivers within a reasonable time frame even with a lag-time margin. There is no logistical issue,” the official said. Both sides, however, agreed that there won’t be any shortage of the drink as the season kicks off.

03 April, 2018