Odisha serves show cause notice on five leading breweries

Odisha Sun Times Bureau
Bhubaneswar, Apr 20:

Acting on the recommendation of the Odisha State Beverages Corporation (OSBC), the state government today issued show-cause notices to five liquor companies in the state why their label licenses should not be cancelled in connection with the dispute over offer price. The companies have been directed to reply within April 25.

liquor shop

Moreover, the Excise Commissioner has written to the Excise secretary for cancellation of manufacturing licenses of two companies.

It may be note that OSBC, the state-run wholesale distributor of beer and Indian Made Foreign Liquor (IMFL) in the state, had urged the state government on Friday last to cancel the licenses of these five breweries which failed the sign the agreement for supply of beer for 2015-16.

The breweries are Carlsberg, United Breweries Ltd, SABMiller India, MP Beer Products Ltd and Devans Breweries Ltd who between them control about 70% of the beer trade in the state.

The OSBC move had come a day after the deadline for the signing of the agreement expired on Thursday.

The corporation had moved the state government for cancellation of factory licenses and label registration of breweries run by these five companies, which are opposed to the reduction in offer price of beer to the extent of 20 per cent in the new excise policy of the state.

The OSBC had urged the Excise Commissioner and Secretary to initiate the process for cancellation of license.

In the event of cancellation of license, the companies will not be allowed to produce alcoholic beverages in the state.

The state government has claimed that excise revenue collection has been affected as the companies are supplying beer without signing the pact. With this, the revenue has dipped 86 percent since the start of this financial year, sources said.

Excise minister Damodar Rout had said on April 18 that the task force recommendations on offer price could be revisited.

“They have submitted a memorandum citing that they would incur losses with the new excise policy. The committee constituted to look into this would decide on it. If their claims are found to be true that they are really making losses, then we would reconsider the decision or else they would be forced to abide by the new excise policy,” he had said.

As per the new excise policy, the state government has reduced the offer price of beer companies by 20 percent and that of IMFL by 10 percent.

Notably, before the expiry of the deadline to sign pact with the government, as many as 31 IMFL and 7 beer companies signed agreements with the corporation.

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