Kerala Chief Minister V.D. Satheesan has rejected the allegations that his government acted in collusion with liquor company Bacardi while imposing taxes on low-alcohol beverages. He also clarified in the Assembly that the state government had only fixed the tax structure for such beverages and had not yet taken a political decision to permit their sale in the state.
This comes amid growing criticism from opposition parties and sections within the ruling alliance over the proposal, which has emerged as one of the most debated aspects of the Budget.
What did Kerala CM say?
Addressing the controversy triggered by last week’s Budget proposal on low-alcohol liquor, Kerala Chief CM Satheesan said that the issue would be discussed within the UDF before a final call is taken.
If the coalition-led government decides against introducing low-alcohol beverages, they will not be sold in the state. However, if the UDF gives its approval, the tax rates already notified by the state government will come into force.
The Chief Minister also launched a sharp counterattack on the previous Left government, accusing it of laying the groundwork for the very policy it is now criticising.
Presenting documents in the House, Satheesan said it was the second Pinarayi Vijayan government that had first initiated steps to introduce low-alcohol liquor in Kerala.
The previous Left government later amended foreign liquor rules and completed procedures to fix taxes sought by multinational liquor company Bacardi, Satheesan continued.
The proposal remained unimplemented only because elections intervened.
He also criticised the tax structure adopted by the Left, noting that Foreign Made Foreign Liquor products with 40-60 per cent alcohol content were taxed at just 78 per cent during 2018-19 before being raised to 115 per cent in 2023.
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.
Launching an 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.
BJP slams Congress
Rajeev Chandrasekhar, BJP state unit chief, in post on X, slammed the CM Satheesan government and wrote, “Anti-drug campaigns on one side. Cheaper liquor on the other. If this doesn’t expose the Congress’ hypocrisy, what does? The CM VD Satheesan government’s decision to reduce taxes on low-alcohol liquor is a dangerous move. It makes alcohol cheaper. It increases accessibility. And it sends a dangerous message to young people that low-alcohol liquor is harmless.”
“You cannot fight substance abuse while making alcohol more affordable and more available. This is not policy. This is hypocrisy,” he added.
He further added in the post that when the previous LDF government was in power and had attempted a similar move, Satheesan had opposed it.
(with agencies’ inputs)
