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Excise seizure of IMFL, just the tip of the iceberg

The seizure of 180 cases of unbranded and non-duty paid IMFL (Indian Made Foreign Liquor) by the Prohibition and Excise officials at Anakapalle on Wednesday, brings to the fore many questions that demand an explanation.

Primarily the two questions that appear to be bothering the department officials are, who was the consignee of the consignment and since when was this trade running.
A couple of senior officials in the department say that the consignees are bigwigs are politicians, including some from the ruling party, and who are based in Anakapalle, Visakhapatnam, Vizianagaram and Srikakulam. “They have all come up by controlling the liquor business in the districts and now the business is run by their family members. It is very difficult to lay our hands on them, as they are well entrenched in politics,” said a senior Excise officer.
A liquor businessman on condition of anonymity said that cheap unbranded and non-duty paid liquor is purchased from distilleries in Odisha and the shops and bars in the district use them to adulterate branded products. This has been happening since long under the patronage of a few strongmen in the trade. It has come out in the open only now after the department had cracked the whip after the recent Vijayawada incident, where five persons had died after consuming spurious liquor at a bar, he said.
The liquor seized was manufactured by Umeri Distilleries of Jeypore, Koraput District of Odisha. In Odisha, there are about 45 distilleries and about 25 of them specialise in manufacturing rectified spirits from molasses, which are said to be cheap and sold clandestinely to traders in AP and Telangana under unbranded and non-duty paid stock.
Rectified spirit from molasses is the cheapest form of IMFL. In AP, rectified spirit is further distilled to be converted into extra neutral alcohol. Then flavours are added to ENA and sold in the market by the breweries.
At times they are further distilled before being sold in the market.
This process makes the liquor costly in AP than from the RS that are smuggled from Odisha, said Deputy Commissioner of Excise, Visakhapatnam, Vivekananda Reddy.
The purchase price of one 750 ml bottle of RS or IMFL from Odisha ranges between Rs. 45 and 60. A premium variety of RS costs between Rs. 80 and 100.
But once the consignment lands in AP, the cost of 750 ml of cheap variety shoots up to Rs. 250 to 300 and the premium one ranges between Rs. 420 to 450. The profit margin shoots over 120 per cent, said Mr. Vivekananda Reddy.
But what is important is that the RS is mixed into the branded ones and sold in the market at even higher price.
“It is difficult to mix in the high end products, as they have ‘bolo’ caps. But are mixed in the low end products and sold in wine shops and bars, especially in the rural belt,” said an Excise officer.
Illegal outlets
Sources say that this culture is rampant in the belt shops in the districts, permit rooms attached to wine shops and bars. They are also sold through illegal mobile outlets.
According to the owner of a wine shop, many are resorting to this illegal practice due to the exorbitant licence fee.
In 2012, the licence fee for a wine shop at a prime location in Visakhapatnam was Rs. 10 lakh, today it is Rs. 65 lakh.
Due to lack of pofit margin, people are resorting to such practices.
The licence policy needs to be revised, as Excise duty and taxes on liquor is the second highest grosser for the state, said the shop owner.

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