With a 21-day lockdown on people movement coming into place overnight, the Kerala government has taken an in-principle decision to allow the sale of liquor via the Internet.
A decision in this respect was taken at today’s meeting of the council of ministers headed by Chief Minister Pinarayi Vijayan, according to local media reports.
Liquor sales contribute the largest chunk of revenue to the state exchequer in a state in which around half the male population consume alcohol.
Alcohol is taxed at extremely high rates in the state, with a bottle that is sourced for around Rs 100 from a factory often retailing for double or more at the end point.
Taxes are not the only source of revenue for the government from the sales of alcohol. Liquor sales are also fully controlled by the government of Kerala, with two agencies, Kerala State Beverages Corporation or BEVCO and and Kerala State Co-operatives Consumers’ Federation (ConsumerFed) enjoying a total monopoly.
Alcohol can also be procured from bars, but can be twice as expensive as that sourced from BEVCO and ConsumerFed.
Alcohol worth around Rs 15,000 cr is sold via the 306 BEVCO outlets and a handful of ConsumerFed outlets per year, and the government earns around Rs 2,600 cr as excise revenue alone.
A steep fall in the sales of liquor could not only give withdrawal symptoms to the general population, but also seriously jeopardize the health of the government’s finances.
It is also associated with a sudden increase in the sales of hooch or moonshine. Illicit liquor not only poses a risk to the life of the people, but can also undermine the ongoing COVID-19 lockdown efforts, besides robbing the government of revenue.
For now, the government has not figured out how to implement the in-principle decision of allowing online sales of liquor.
It is unlikely to allow e-commerce majors like Amazon and Flipkart to sell liquor, given the possibility that the bottles may find their way outside the state or be otherwise diverted or misused.
It is possible that the government may set up its own online liquor sales portal.
The move comes in the wake of the recognition of the crucial role that e-commerce can play in preventing the spread of Coronavirus, as well as the likelihood of the current restrictions being extended beyond April 14.