Thiruvananthapuram: The Kerala State Beverages Corporation (Bevco) is facing resistance from the grouping of major liquor companies over the former's move to raise commission.
The Confederation of Indian Alcoholic Beverage Companies (CIABC) has come out against the decision of the state-run firm that has monopoly in the procurement and sales of liquor, particularly Indian Made Foreign Liquor (IMFL) and beer, in Kerala.
The decision to charge higher commission on sales is contained in the tenders invited from the liquor companies for the next financial year.
The CIABC has given a letter to Bevco, seeking changes in the relevant clauses contained in the tender. It has also approached the State Government with the same request.
Bevco had earlier decided to introduce a slab system for the commission or cash discount charged from the liquor companies. The commission was charged by Bevco for bringing liquor bottles to its outlets from the warehouses.
As per the new slab system, for sale above 10,000 cases of a brand in a year, the liquor manufacturer has to give 20 percent commission to Bevco.
Bevco has also introduced the concept of Ensured Sales Channel by which it will ensure the sale of the entire stock of a company if it is given 25 percent commission. Besides, each brand has to give 8 percent warehousing margin to Bevco.
The Confederation has pointed out in the letter that as the wholesale trader, this is unfair on the part of Bevco in claiming 33 percent commission. Usually, the wholesale traders charge 2 per cent as warehousing margin for consumer goods.
Bevco had asked for a 2 percent margin initially; now, it is 8 percent.
Confederation general secretary Vinod Giri said that the government's offer of giving priority to brands of the companies which offer 25 percent of commission was an infringement on the right of consumers to choose their favourite brands.
However, Bevco clarified that the slab system for commission was introduced to promote new liquor companies. It further said that the warehousing margin was charged from the consumers and not from the companies.
SALES TAX FOR KERALA-BASED COMPANIES LIKELY TO BE CUT
The Kerala Government is likely to stop charging 12 percent sales tax from beverage companies producing liquor in the State.
The move is contemplated in view of the opening of production units in neighbouring States by several Kerala-based liquor companies. Such units are mostly coming up in areas bordering Kerala. As a result, Kerala is losing out both investment and employment opportunities.
