Thiruvananthapuram: More than 800 bars and 40 liquor outlets of Consumerfed across Kerala have shut operations citing financial loss.
The outlets turned sick as the Beverages Corporation (Bevco) increased its warehouse rate and slashed the profit margin of retailers. Bars were allowed to sell liquor at the Bevco rate from June 17.
The bars and Consumerfed liquor outlets decided to cease operations from Monday, three days after the sale of liquor had resumed in the state. Liquor outlets remained closed as per the stringent lockdown norms to combat the Covid pandemic.
The president of the Federation of Kerala Hotels Associations, V Sunil Kumar, said private bars could resume parcel service only if the government took a decision favourable to them.
Squeeze on profits
The profit margin of retail outlets fell to three per cent from 20% after Bevco increased its warehouse rate to 25% from eight per cent.
Private bar owners said they would incur a loss of Rs 9,000 while selling liquor worth Rs 1 lakh under the revised Bevco rate.
Explaining the loss, Federation president Kumar said each bar has to pay 12% tax, Rs 10,000 daily as licence fee, transportation and unloading expenses, and salaries of employees, leading to loss.
Bevco officials questioned the bars’ stand, asking how they sold liquor when the warehouse rates had been 35% five years ago.
Bevco is the wholesale seller of liquor in the State.
No impact on consumers
The decision of bars and Consumerfed, meanwhile, won’t affect the consumers, since liquor was being retailed through Bevco outlets.
High-level meet
Taking cognizance of the closure of liquor outlets, the Office of the Excise Minister said the issue would be discussed in the presence of the Law Secretary on Wednesday. Minister M V Govindan held talks with Bevco officials on Monday.
The government would make a decision based on the outcome of the meeting to be held in the presence of the Law Secretary. The government ruled out plans to increase the price of liquor through backdoor operations.
Earlier, the organization of bar owners had demanded the government to slash the annual licence fee to balance the loss of more than Rs 10 crore incurred when bars were forced to destroy unused beer during the Covid lockdown last year.
Bevco has suffered a revenue loss of Rs 1,800 crore due to the lockdown.
