The Telegraph
Since 1st March, 1999
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Jaya targets liquor cartel

Chennai, Oct. 26: The Tamil Nadu government today took over the retail liquor trade to “completely eliminate the liquor cartels”.

Jayalalithaa’s ADMK regime promulgated an ordinance to amend the Tamil Nadu Prohibition Act, 1937, thus “granting the exclusive privilege of retail vending of Indian Made Foreign Liquor (IMFL) to the state-owned undertaking, Tamil Nadu State Marketing Corporation (Tasmac)”.

The major policy decision, taken barely a week before the Assembly’s short monsoon session begins, was aimed at overcoming the huge revenue losses to the state exchequer through “distortion” in the retail trade.

An official statement issued this evening said the decision would help in “eliminating the sale of contraband, non-duty paid and spurious liquor, as also the malpractice, including violating of the maximum retail price norm, indulged in by the private retailers”.

Until now, Tasmac was entrusted only with the wholesale trade in IMFL, acting as a bulk channelling agency for IMFL and other products to government-licensed private retailers a nd wine dealers. Now on, the corporation’s direct agencies, namely its cooperatives, will undertake retail trade of IMFL and other liquor, the statement said.

The release also charged the present invisible cartels with “unfair practices” that posed serious health hazards.

The government acknowledged that the introduction of the “lots system” in 2001-02 had failed to curb the malpractice born under the earlier auction system.

The cartels had continued to ensure that a sizeable number of shops remained unlicensed in 2002-03, it said. Their intention was to “control the retail market and cause loss of revenue to the government”.

A new system of “selection of applicants based on merit” was introduced in allocating liquor shops to private retailers for the excise year 2003-04.

The aim was to stop the continued sale of spurious and contraband liquor, and other malpractices.

This system worked through district-level selection committees of two retired judicial officers each, who applied a pre-announced eligibility criteria.

But “very few completed applications had been received by the last date for submission of applications, namely October 18” under the modified system, the government said.

The last date was extended to October 22, but to no avail. This, the government said, indicated the “cartels are active again with the specific intent of controlling the retail market”, even at the cost of thwarting sale at a large number of private retail shops.

The government was thus left with no option but to nationalise retail sale of liquor, the statement said.

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