Hype and hypocrisy in the sale of liquor

My first disclaimer is to state upfront that I am a teetotaler. Second, I have written often against surrogate advertising for liquor. So, I have no personal interest or ulterior motive in writing this piece on the sale of liquor. Except to highlight the hype and the hypocrisy involved.

When liquor stores were re-opened recently, there were serpentine queues, no social distancing, and baton charging by the police. Much media hype ensued. The Supreme Court and various high courts were petitioned. Some decrees were passed for home-deliveries of liquor. But only till the lockdown ends.

The base narrative of my piece today is that governments in India — both Central and state — must learn to separate alcohol related social issues from responsible consumption. And adapt to changing times.

Let us start from the beginning. The Directive Principles of State Policy (DPSP) in the Constitution of India (Article 47) state that “... the State shall endeavour to bring about prohibition of the consumption, except for medicinal purposes, of intoxicating drinks … which are injurious to health”. The DPSPs are not-justiciable rights of the people, but fundamental in the governance of the country, and are the basis of the excise policies across most states. Gujarat has been a “dry” state since 1960. Some states, like Goa, Punjab and Karnataka take a more lenient view; states like Maharashtra have a permit system, and states like Bihar and a few North Eastern states have over time opted to go “dry”.

States that are not “dry” earn a significant amount of their revenue from the sale of liquor via excise and value-added tax (alcohol is not covered under the goods and services tax). In most states this contribution to the exchequer is crucial to the functioning of the state machinery. These taxes are one of the highest in the world. In most states excise and VAT accounts for more than 50 per cent of the retail pricing of liquor. Add to this the 150 per cent customs duty that the Centre pockets on imported alcohol; and then there is the GST for liquor served in bars and restaurants. Yet, when it comes to liquor ,the federal and state governments treat it like a stepchild — why the hypocrisy? Why the entire holier-than-thou drill on anything, and everything, to do with booze?

Countries like the UK and the US have unsuccessfully gone through eras of prohibition, and have evolved to now classifying liquor as essential, and kept the supply of the same open and available during Covid lockdowns. The e-commerce of wines and spirits has been available for many years now in Europe and North America and this has been functioning without any increased adversities on the social front. The question is why can’t e-commerce of liquor be a continued reality in India?

Well, to the first stance of the government. Excise is a state subject, thus sale of liquor needs to be limited to state borders. Well, this is also the case in the US. They manage to control this effectively. So, it is possible to have e-commerce limited to state borders.

Now to the second stance of the government: Social responsibility. Government must understand that by using checks and balances, especially with the use of technology, it is possible that home delivery and e-commerce can happen in a more controlled, trackable manner. For example, in Mumbai, it is possible that deliveries can happen only after “valid permits” are recorded for every invoice of sale, something that is mandatory in brick-and-mortar sales but never actually ever done. The moot point is that if credit cards and passports can be home delivered via verification, why can’t the same apply to liquor that too can be delivered after proper age verification and know your customer (KYC) details are recorded. My personal belief is that just like how digital payments are better tracked than hard cash, tech-enabled liquor delivery systems will prevent bootlegging and more importantly avoid spurious liquor sales.

In Delhi, the recent milking of the low hanging fruit — taxing liquor more — by slapping a 70 per cent Covid tax is somewhat short sighted. As soon as the borders are open, people will engage in unnecessary booze binge journeys, drunk driving and road risks will increase. It’s a given fact that bootlegging might go up significantly as the Haryana/ Uttar Pradesh borders are only a stone’s throw away.   

       

By 2025 India will have the world’s largest population of legally age qualified drinkers; let us treat them as adults and most of them will behave as responsible adults. E-commerce of liquor is a reality in most of the Western world and it has not increased alcohol related social issues by any measurable margin. Prohibition and excessive control is not the solution; early education on social responsibility is the better and more productive approach.

The e-commerce and home delivery of liquor is a positive step. Hope it stays post the lockdown.

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The writer is an advertising and media veteran