The cost of foreign-made foreign liquor (FMFL) in Kerala is set to rise by 11-12 percent starting from October 3. This decision comes after the government initially granted Bevco (Kerala State Beverages Corporation), responsible for liquor sales in the state, permission to increase FMFL prices by a substantial 26 percent. However, Bevco chose to opt for a more conservative margin adjustment.
Previously, the government had given its nod to Bevco’s proposal to boost the warehouse margin from 5 to 14 percent and the shop margin to 20 percent. Nevertheless, Bevco opted to only increase the shop margin to six percent while elevating the warehouse margin to 14 percent.
Bevco currently collects nine percent as a warehouse margin and 20 percent as a shop margin on Indian-made foreign liquor (IMFL) sales. Based on this model, a similar margin increase for FMFL was proposed, which would have led to a 26 percent price hike. However, as FMFL constitutes a mere 0.25 percent of total liquor sales in Kerala and isn’t a significant revenue source for Bevco, they chose to be more lenient with the shop margin.
In response to this move, the association of liquor manufacturers has called for a rollback of the margin hike. Nita Kapoor, CEO of the International Spirits and Wines Association of India, and Suresh Menon, its general secretary, expressed concern, stating, “While the government will not gain much from the increase in margin, it will deal a big blow to consumers and manufacturers.”
Meanwhile, the Kerala Government has also raised the margin on foreign-made wine by an additional five to six percent.
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