With Andhra Pradesh on course to become the next taker of sobriety, is there a forced teetotaler trajectory to Indian states?
- Andhra Pradesh’s new Chief Minister YS Jagan Mohan Reddy announced plans to keep up his poll promise of alcohol ban in the state.
- The ban aims to “protect the interests of poor and happiness should prevail in every family by removing this menace.”
- If AP goes through with the prohibition, it wouldn’t be the first time, former CM NTR banned in 1995, but was revoked in 16 months.
The southern states newly sworn in young Chief Minister Y S Jagan Mohan Reddy announced plans from a total ban on alcohol in the state by 2024. Reddy said that ‘belt shops’ should be removed to “protect the interests of poor and happiness should prevail in every family by removing this menace.”
The move isn’t a first – it follows the trajectory set in motion by now-dry states like Gujarat, Mizoram, and Bihar. It is a growing trend that now puts the highly lucrative industry on the back seat in comparison to addressing a perceived issue in certain sections of the society – which can be construed as appeasing a particular vote-bank.
Idea behind banning alcohol
AP’s new Chief Minister Y S Jagan Mohan Reddy wants to fulfill his manifesto promise of implementing a complete alcohol ban in the state. Alcohol will still be served in luxury hotels serving the uber-rich.
The government gradually acquires control over liquor supply. This makes the ban’s focus as that of addressing the issue by curbing the access in the middle, lower-middle and working class strata.
But in the progressive times we live in, is such a flat out restriction the right approach to make adults manage themselves better?
Societies should be moving towards a more liberal mindset that puts the onus on individuals, testing their integrity in the way they contribute towards the society. Instead, the current trend is more towards conserving values and implementing new measures by law and policing.
How this fares for companies?
In such cases, liquor companies like USL and United Breweries may have to cope up with significant loss of revenue. The measure would be a setback for liquor manufacturers and traders alike.
Shekhar Ramamurthy, MD of United Breweries said that AP is a very important market with 38 million cases of Indian-made foreign liquor sales and comments from the AP government are worrying for the industry. They expect that total business will be impacted by 5-6 percent.
Although, it is not easy to put the actual impact in terms of revenues and profit loss, it hurts the individual, small-time stakeholders more than the liquor barons who are somehow able to recover some of the blow in the increased surge of Alcohol tourism in other states.
The Government perspective
Government’s vision for such bans apparently reason that it is about cleaning up the society. Helping distraught women with alcoholic partners in some cases is the narrative of state CMs. Women too have come out supporting such bans.
States also initiate parallel measures like de-addiction and awareness programs to support the cause and help people who are being forcefully made to let go of alcohol addiction are able to cope with the withdrawal.
Barring exceptions like Gujarat, such prohibitions seldom pass the test of time.
Most bans are revoked in a few years of implementation – often due to internal resentment in the state – or in some cases due to the change of government and the trajectory of another party to appease the section forcefully made sober.
History of prohibitions and revocations
In 1995, NT Rama Rao won elections on alcohol ban promise. But his ban remained in force only for a mere 16 months. It was reversed by his son-in-law Chandrababu Naidu when he became the new CM, citing huge loss to the exchequer.
History suggests that bans are rarely long-lived. In most states where liquor bans were brought into effect, they were called off within a few years. Here are a few examples:
- Haryana banned liquor in 1996, but called it off in 1998.
- Andhra Pradesh had previously banned liquor in 1994, but it was subsequently repealed in 1997.
- Kerala banned alcohol in 2014, but a change of government in 2017 saw the ban revoked.
How the ecosystem changes?
Ironically, a number of examples base that a liquor ban in one state can result in sharp rises in excise revenue in neighbouring states.
While the government move opines that attempts are being made to check alcoholism, seldom are the people with enough money retrained.
The bans give rise to a new kind of getaway that’s called alcohol tourism. Such border towns see a sharp rise in the number of liquor stores.
In 2016, Bihar’s liquor ban caused a spike in excise revenue in West Bengal, Jharkhand and Uttar Pradesh. In fact, prohibition in Bihar proved a boon for the state’s Maoists, who made money by supplying alcohol to their areas of influence.
This suggests either that liquor is smuggled from states with prohibition to states without it, or that alcohol consumers are willing to cross state borders in order to partake.
Such a scenario, quite unarguably fails the sheer vision of the government and more so puts it in a grey spot – was the prohibition a well-thought out stance for the long-term benefit of the state? Or was it fueled from the analysis of an election strategist or vote bank oriented politics to garner confidence in the short-term.
- Historically, such prohibitions have failed to stay in place for long, and are revoked often by the very next Chief Minister who comes into power.
- Prohibitions often result in increased footfall in neighbouring states that surges revenues in the face of the deficit induced by the prohibition in the banning state.
- Such bans have rapidly given rise to ‘Alcohol Tourism’, where drinkers from the banned states flock in numbers to border towns of neighbouring states.