Cuttack, May 6: The controversy over the state government's decision to reduce the "offer price" of beer has taken a new turn with some of the manufacturing and supply companies seeking intervention of Orissa High Court today.
Four companies - Fortune Spirit Limited, Carlsberg India Private Limited, Sabmiller India Limited and United Breweries Limited - filed petitions, challenging the notification issued by the state excise department on March 3 reducing the offer price of beer by 20 per cent and 10 per cent in the case of India Made Foreign Liquor (IMFL) products for supply to the state.
The court has posted the matter to May 13.
After consultation with the government, the manufacturing and supply companies decide on the offer price at which they would supply liquor to the Odisha State Beverage Corporation. Then the corporation supplies beer and liquor to all trading shops across the state. Once the offer price is decided, other prices, including excise duty and the corporation's profit margin, are added. Taking all into account, the corporation decides on the maximum retail price of beer and other liquor brands.
The existing offer price indicates that the companies supply a case of beer (12 bottles - one bottle contains 650ml) to the corporation for Rs 500 and the state government charges Rs 500 on it as excise duty and other taxes. Now, a case of beer coasts around Rs 1,140, including a margin of Rs 140 that is kept by the traders. Consequently, a customer gets one beer bottle for Rs 95.
By bringing in reduction of 20 per cent in offer price, the state government expected the companies to supply a case of beer to the corporation for Rs 400 instead of Rs 500, so that it can get Rs 600 instead of Rs 500 for one case of beer.
"The division bench of Justice Indrajit Mahanty and Justice Biswanath Rath adjourned hearing on the petitions after advocate general Surya Prasad Mishra had stated that the government was considering the companies' grievances and expected to take a decision shortly," said advocate Manoj Mishra, counsel for two of the petitioner companies. "Our basic contention is that the state government's decision is arbitrary. It has no power to fix the offer price," Mishra said.
The legal dispute assumes significance as the petitioner companies, which cater to 80 per cent of the state's beer requirements, had been protesting against the reduction in offer price and not signing renewal MoUs with the corporation for supplying liquor.
The stalemate had led to shortage of quality beer and the IMFL products in the market and reportedly delivered a blow to the tourism and hospitality industries in the state.
