Kerala CM VD Satheesan rejected claims of collusion with Bacardi over low-alcohol beverage taxes. He stated the process was started by the previous LDF govt and his govt only set higher tax rates for an already created category.
Keralam Chief Minister VD Satheesan on Wednesday rejected allegations that his government acted in collusion with liquor company Bacardi while imposing taxes on low-alcohol beverages. Addressing the Assembly during discussion on the state budget, Satheesan said that the process of creating and promoting the category had begun during the previous LDF government's tenure, headed by Pinarayi Vijayan. He said that the Opposition was misrepresenting the controversy surrounding the taxation of low-alcohol beverages.
Satheesan Blames Previous LDF Government
"We imposed a tax on low-alcohol beverages, and allegations were raised that the Chief Minister acted in collusion with Bacardi. Let me explain. The process actually began during the second Pinarayi government. Within six months of assuming office, the then minister and current CPM state secretary, MV Govindan, had directed that applications from Bacardi India, SDF Industries and others be examined and a report be submitted after defining low-alcohol beverages. So who first engaged with Bacardi?" Satheesan said.
The Chief Minister argued that the LDF government's liquor policy of March 31, 2022, based on the recommendations of the Udayabhanu Commission, had itself proposed promoting beverages containing up to 20 per cent alcohol. "The allegation now is that low-alcohol beverages will destroy the younger generation. But the LDF government's liquor policy of March 31, 2022, itself, based on the Udayabhanu Commission recommendations, stated that liquor with up to 20 per cent alcohol content should be promoted and made available," he said.
Satheesan noted that the previous government had informed the Assembly that Bacardi India had sought permission to market products such as Bacardi Breezer and Bacardi Plus in the state. He alleged that the 2022-23 liquor policy had proposed amendments to the Foreign Liquor Rules to facilitate the sale of beverages containing between 0.5 and 20 per cent alcohol.
Explanation of Tax Decision
Explaining the taxation decision, Satheesan said Bacardi had sought a separate tax category between beer and wine. While beer was taxed at 116 per cent and wine at 86 per cent, the government ultimately decided to levy higher taxes than those sought by the company. "Instead of accepting the rates suggested by the company, we fixed 120 per cent tax for beverages up to 10 per cent alcohol and 175 per cent for those between 10 and 20 per cent. After studying other states, we found that Kerala has the highest tax rates for such beverages," he said.
UDF to Decide Future Policy
The Chief Minister further contended that it was the previous LDF government that had created the low-alcohol beverage category, while the present government had merely fixed tax rates for an existing category. "It was the previous government that created the category of low-alcohol beverages. We have only fixed tax rates for an existing category. Whether Kerala should permit such beverages is a political decision. The UDF will discuss it with all stakeholders and coalition partners before framing a liquor policy. If the UDF ultimately decides that low-alcohol beverages should not be sold in Kerala, then they will not be sold," Satheesan said.
Attack on LDF's Liquor Policy Record
Launching a broader attack on the Opposition's liquor policy record, Satheesan claimed that when Pinarayi Vijayan became Chief Minister in 2016, Kerala had only 28 bars, whereas the number had now risen to more than 900. "When Pinarayi Vijayan became Chief Minister in 2016, Kerala had 28 bars. Today, there are more than 900 bars. Those who expanded liquor outlets in the name of controlling liquor consumption are now advising us on liquor policy. This budget is only the beginning. We will rewrite Kerala," he said. (ANI)
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