Odisha issues show cause notice to beer sellers

The five beer majors are opposing the proposal of 20% reduction in offer prices as mentioned in the new excise policy of the state

Acting on the recommendation of Odisha State Beverages Corporation (OSBC), the sole wholesale distributor of alcoholic beverages in the state, the excise commissioner has issued show cause notices to five beer makers asking why their label registrations should not be withdrawn.

The five beer majors, SABMiller India Ltd, Carlsberg India Pvt Limited, United Breweries Ltd, MP Beer Products Ltd and Devans Breweries Ltd, are opposing the proposal of 20 per cent reduction in offer prices as mentioned in the new excise policy of the state.

"They have been asked by the excise commissioner to reply to the show cause notice by April 25", said Dwijaraj Kar, managing director, OSBC. In addition, the state excise commissioner has written to the secretary, excise department, seeking direction to the district collectors for cancellation of brewery licenses of two major liquor companies - SAB Miller and United Breweries. While SABMiller has its brewery in Jagatsingpur district, United Breweries has its beer unit in Khurda district.

Together these five suppliers have more than 70 per cent market share in the state.Earlier, Kar, in a letter to the excise commissioner, had requested the latter to cancel or withdraw label registrations as well as brewery licenses of these companies as they had not turn up for signing the agreement with OSBC for supply of beer during the current financial year.

SABMiller India sells beer under the brand names of Haywards 5000, Fosters and Knockout while Tuborg and Carlsberg are the popular brands of Carlsberg India. Vijay Mallya owned United Breweries sells its beers under the head of Kingfisher, Kalyani Black Label. The main brands of MP Beer Products Ltd and Devans Breweries are Maharani and God Father respectively.

The non-execution of agreement with OSBC has taken a toll on the excise duty collection. The duty collection has dipped by about 86 per cent in the first 15 days of the new fiscal compared to same period of the last financial year due to the crisis.