India: Fallout From Alcohol Sales Re-Opening
As India moves to relax lockdown laws, the nationwide alcohol retail sales ban has been lifted. While the alcohol industry is rejoicing about the lifted ban, the fallout has led some states to prolong their ban while others have instituted to alcohol tax increases to limit likely alcohol harm.
Going into the third phase of the COVID-19 lockdown on the May 4, the Ministry of Home Affairs (MHA) has issued new guidelines with some relaxations for areas marked green and orange. Under the relaxation the government has allowed certain types of liquor shops (L6 and L8) to open. These are operated by four state run agencies. All malls, markets and supermarkets are to remain closed and pubs, bars and restaurants are also still closed.
States which have lifted the ban on alcohol sales according to MHA guidelines include, Karnataka, Assam, Delhi and Goa.
The liquor stores which will open are expected to maintain the minimum 6 feet distance between people and admit only 5 people within the store at a single time.
Big Alcohol overjoyed with lifting of retail ban
Under these guidelines about 50% of the 70,000 liquor stores in India can now open for sales. Big Alcohol lobby groups in India are maximizing on the lifting of the ban and stating the ban was a loss of revenue for the country. International Spirits & Wines Association of India (ISWAI) whose members include alcohol giants Diageo and Pernod Ricard says alcohol brought INR 700 crore revenue per day and INR 2.5 trillion annually.
ISWAI and another alcohol industry lobby group, the Confederation of Indian Alcoholic Beverages Companies (CIABC), have both pushed the government to lift the ban citing that INR 30,000 crore has been lost as revenue due to the ban in the past month and a half.
As soon as the government lifted the ban it led to a hectic buying of alcohol industry shares. United Spirits reported a gain of 4.4%, United Breweries closed with 3.4% higher gains and Associated Alcohols & Breweries rose strongest with 17% gains. Notably, these gains for alcohol industry stocks came on a day the sensex crashed 6%.
Despite the revenue argument of the Big Alcohol lobby, as Movendi International previously reported, cost of alcohol in India far outweigh revenue from alcohol taxes. One study found that alcohol harm in India costs more than the entire health spending in the country. Even after adjusting for tax receipts from sale of alcohol, alcohol poses a net economic loss of INR 97,895 billion (US$ 1506 billion).
Contrary to what Big Alcohol claims and in light of scientific evidence of the economic and health harm from alcohol, keeping liquor stores closed during the current public health crisis could actually be better for Indian society and economy than opening them.
Unlike in Western countries, about 70% of alcohol sales in India happen through retail sales, not on-trade sale such as in restaurants or bars. This means opening up alcohol retail would open up the country to high availability of alcohol and alcohol harm during the pandemic.
Troubling developments with lifting the ban
The World Health Organization (WHO) has recommended for governments to restrict access to alcohol during the pandemic for several reasons, including:
- Alcohol harms physical and mental health,
- Alcohol weakens the immune system and makes people more susceptible to COVID-19 and its complications,
- Alcohol causes road traffic accidents, injuries and death,
- Alcohol fuels violence and specifically domestic and gender-based violence, as well as child abuse and neglect,
- All of the above leads to further burdening of healthcare systems and emergency services, and
- The gathering of people around alcohol stores or gathering to consume alcohol threatens physical distancing measures and the containment of the novel coronavirus.
In many states that re-opened liquor stores, people were observed stampeding, gathering in masses and ignoring physical distancing requirements altogether. For example in New Delhi 150 of the 850 liquor shops were allowed to open from 9 AM to 6:30 PM, but many had to be shut down within the hour or by noon due to unruly behaviour of crowds who came to purchase alcohol.
Shops were asked to shut in places where social distancing norms were violated. At some places, mild force was also used to disperse the crowd,” said a senior police official, as per The New Indian Express.
Big Alcohol is meanwhile putting the blame on the government saying they should control the crowds.
The government would have to control it, we have witnessed today a lot of rush on the shops and the local police, which was required to control the crowd, was not there.” said V. N. Raina, Director General of the All India Distillers Association (AIDA), as per The Times of India.
Another troubling development is that Big Alcohol lobby groups are now using the unruly behaviour of crowds who came to purchase alcohol to push the Indian government to legalize online alcohol retail and home delivery.
As Movendi International previously reported, alcohol lobby group CIABC was using an economic and livelihood argument to request online sales. Now it seems two more alcohol industry groups, All India Distillers Association (AIDA) and All India Brewers Association (AIBA) have joined CIABC to push the government to permit online alcohol sale.
We have already suggested home delivery for liquor as we had anticipated that there would be rush and crowding. This can only help in reducing the footfalls at the liquor shops,” said Shobhan Roy, Director General of AIBA, as per The Times of India.
Several alcohol prevention and control activists have voiced their objections to lifting the alcohol ban during the pandemic and lockdown measures. Some of their objections include:
- During lockdown violence against women have reportedly increased according to the Centre for Social Research (CSR). Alcohol is known to be linked to violence and lifting the alcohol sales ban will further increase violence against women and children who are stuck at home with their abusers;
- Due to COVID-19 lockdown rules, family economies have already gone down as people lose jobs or get salary cuts. Spending on alcohol will further drain the family economy and cut into spending on essential needs of families;
- Lifting the alcohol ban will increase alcohol use disorders and addictions; and
- Theft and other violence can also increase due to alcohol.
According to the government’s own National Family Health survey data, there is a direct link between alcohol use and violence by men. So certainly it will escalate. Already there are two times more cases of domestic violence reported to the NCW, ” said Dr. Ranjana Kumari, Director of the Centre for Social Research (CSR), as per Pune Mirror.
I don’t understand how the government considers alcohol as essential service? Addiction can never be essential. In fact, this lockdown situation was a perfect opportunity for the government to utilise it for de-addiction,” said Yogita Bhayana, a Women’s Rights Activist, as per Pune Mirror.
Measures to prevent and reduce alcohol harm
Several states of India have taken bold measures to try and limit the likely harm from alcohol with lifting the alcohol ban during lockdown.
- In Kerala the government has decided to continue the alcohol ban.
- In Andhra Pradesh the government initially increased alcohol taxes by 25%. As this did not dissuade sufficiently enough people from crowding liquor stores, taxes were increased a further 50% resulting in a 75% tax increase. The Andhra Pradesh government has also decided to decrease liquor stores by 15% by May.
- The New Delhi government has also increased alcohol prices by charging a special coronovirus fee of 70% of the MRP of alcohol.
Meanwhile, in Madras, a public interest litigation petition has been filed in the Madras High Court by activists. The petition seeks for the State government to impose total prohibition in the State, citing that people have learned to live without alcohol during the COVID-19 lockdown.
With the challenges arising from the COVID-19 pandemic, the Indian Federal Government would do well and resisting alcohol industry pressure and maintain the alcohol sales ban rather than lifting it, considering the problems of physical distancing which have already risen with the lifting of the ban and threats to Indian people from alcohol harm.
Business Standard: “Covid-19 woes: Relaxed lockdown norms bring cheer to liquor industry“
The Times of India: “Alcohol stocks up as shops reopen“
The Times of India: “Liquor makers pitch for crowd management, online sales as boozers swarm shops“
Telangana Today: “Andhra Pradesh hikes liquor rates“
The New Indian Express: “Jagan government hikes liquor prices by another 50 per cent to revive Andhra economy“
The Hindu: “Plea to impose total prohibition“
The New Indian Express: “Many liquor shops in Delhi shut after crowd turns unruly, fail to follow social distancing norms“