Hope and scepticism are the major reactions from distillers and liquor manufacturers to the demand for prohibition by the opposition political parties.

Major parties in Tamil Nadu including the DMDK, DMK, BJP and the MDMK are demanding the State Government ban the sale of liquor, as rampant consumption is affecting the youth. Prohibition has emerged the common theme ahead of the Assembly elections next year.

Sale of liquor is under the control of the State, which handles procurement from manufacturers and retail sales through government agency Tasmac (Tamil Nadu State Marketing Corporation).

The issue is that alcohol sales through 6,800 Tasmac shops is the single largest revenue earner for State Government and is growing, while the second major source, commercial tax, is waning given the slow economic condition.

Revenue contribution According to official figures, commercial tax on alcohol is expected to bring in ₹29,672 crore in 2015-16 against ₹26,188 crore in 2014-15. Just a decade back, revenue from liquor was about ₹3,600 crore.

Liquor contributes nearly one-third of the State’s revenue, estimated at ₹85,772 crore last year. The State Government had revised it downwards from ₹101,557 crore at the beginning of the year as contribution from commercial taxes dropped. Liquor revenue effectively under pins the economy of the State.

Tamilisai Soundararajan, State BJP leader, addressing media persons on Sunday, said alcohol contribution to the exchequer cannot be an excuse to allow the continued debilitation of the youth. The Tamil Nadu Government should call for a meeting of industrialists and explore options to enhance revenue. Distilleries linked to sugar mills supply raw material to liquor manufacturers to produce Indian Made Foreign Liquor.

Senior executives in sugar companies believe the impact of prohibition will be beneficial under prevailing conditions.

If at all prohibition happens, it will help the ethanol-blended automobile programme to take-off. Supplying to the ethanol programme will be more remunerative, say company officials. Supplying to the alcohol industry fetches about ₹42 a litre.

But the Centre has pegged the price for ethanol supply to oil marketing companies at about ₹49 a litre from October 2015.

With an installed capacity of about 320 kilolitres of ethanol daily (spread mostly across private sector sugar mills), distilleries stand to gain significantly. Also, the advantage will be pricing consistency and assured off take.

But the main players – liquor manufacturers – are mum on the topic. Recently, the Kerala Government announced prohibition but it is yet to happen. Andhra Pradesh and Tamil Nadu have dabbled with prohibition earlier, but have given it up on earlier occasions. Prohibition has always resulted in sale of illicit alcohol. Stopping sale will not stop consumption, they say.

CM review meeting According to PTI, against the backdrop of continuing stir, the Chief Minister held a meeting at the Secretariat with top officials on Monday to review the law and order situation in the State.

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