After opposition leader Ramesh Chennithala alleged a Rs 100 crore scam in the decision to raise liquor prices in the state, excise minister T P Ramakrishnan indicated on Sunday that the government might consider tax reliefs to bring down the prices.
He, however, denied that there was any corruption in the decision to raise the prices of various liquor varieties. The minister agreed that Kerala had a higher liquor tax compared to other states.
He said the price increase had been necessitated by increase in the cost of raw materials. Companies had asked for a price hike in view of the increase in the cost of extra neutral alcohol, which is the basic raw material used for the manufacture of liquor.
The demand had been made a year ago, but a decision was deferred in view of the outbreak of Covid-19.
But the government recently decided to allow a 7 percent increase in liquor prices for distributors who had entered into contracts with Bevco, the government agency responsible for the production and wholesale distribution of Indian-made foreign liquor. Beer and wine were spared from the rate increase.
Ramesh Chennithala had alleged that discussions were held between the ruling party leaders and the distillery owners at AKG Bhavan, the state party headquarters, where the deal was struck for an increase in prices. He alleged that the deal involved a kickback of Rs 100 crore.
Bevco has announced a 7 percent increase for companies that have entered into distribution contracts for the current year. The companies are supposed to continue to supply beer and wine at the previous year’s rates.
With this year’s price increase, the LDF government has allowed a 14 percent increase in the price of liquor over the past three years, which amounted to providing support price for the distillers, Ramesh alleged.
The beer and wine manufacturers had submitted fresh tenders with brands categorised as premium, deluxe and strong, but the government refused to agree to the proposal.
The new rates are expected to come into force on February 1.
