According to an Indian government report on substance abuse released in 2019:
- West Bengal is placed second in the list of the five biggest alcohol consuming states in the country, with 14 million people consuming alcohol.
- This state has a high proportion of children consuming alcohol at (3.9%).
- 270,000 people who consume alcohol in West Bengal need help for alcohol problems.
Despite the obvious harm caused by alcohol to people in this state, alcohol availability has been further increased through home delivery, which was pushed during the COVID-19 pandemic.
West Bengal is a state in the eastern region of India along the Bay of Bengal. With over 91 million inhabitants, it is the fourth-most populous state and the thirteenth-largest state by area in India, according to Wikipedia. Part of the Bengal region of the Indian subcontinent, it borders Bangladesh in the east, and Nepal and Bhutan in the north. It also borders the Indian states of Odisha, Jharkhand, Bihar, Sikkim and Assam. The state capital is Kolkata, the seventh-largest city, and the third-largest metropolitan area in India.
West Bengal was one of the first states in India to allow online sales of alcohol. According to West Bengal State Beverages Corp, the official state-owned agency responsible for the liquor trade in West Bengal, both Amazon and BigBaskets (related to Alibaba) obtained permission for alcohol home delivery in the state.
Coupled with the online trade is the new strategy by Big Alcohol of introducing small bottles of alcohol. With the pandemic, lockdown measures and tax increases on alcohol, the consumption was set to reduce in the country. Identifying this threat to their profits the alcohol industry started launching small bottles of alcohol from beer to whisky and rum. Major companies including AB InBev, Diageo, Amrut Distilleries and Radico Khaitan are all employing this strategy. Now small bottles are expected to sell more online at first as people try out the new online platforms.
The aim of the industry is to increase alcohol consumption and they are not hiding this fact. Nitesh Chhapru, Diageo India’s vice president of marketing and business innovation and Radico Khaitan’s chief operating officer Amar Sinha have both made comments suggesting that driving higher consumption of alcohol through smaller packaging is a cornerstone of their strategy.
West Bengal alcohol tax increase, yes or no?
The current alcohol policy struggle in this state ridden with alcohol harm is whether to increase alcohol taxes or not.
West Bengal as it is is severely burdened by alcohol harm. Even alcohol control policy in the state is at times contradictory betraying policy incoherence. The government has increased alcohol availability via online retail and on-demand home delivery, but at the same time wants to increase taxes of alcohol – focusing more raising revenue than on reducing the alcohol burden and preventing harm. Alcohol policy solutions are more cost-effective and impactful when they are coherent and applied in an integrated manner, as a package for betterment of public health.
But in West Bengal alcohol policy is not used as a tool for public health and sustainable development. Between 5 to 10% of revenue for the state comes from alcohol. This has made the state government dependent on the substance and risks making the public health aspects of alcohol taxation redundant.
The government has proposed a tax increase for alcohol. Under the proposed policy, consumer prices of fast-moving brands will go up by 40 to 90%.
Big Alcohol is of course opposing this policy proposal. Alcohol industry bodies Confederation of Indian Alcoholic Beverage Companies (CIABC) and International Spirits and Wines Association of India (ISWAI) have written to the chief minister opposing the decision on grounds that the industry could not suffer more loss and that the tax increase would lead to revenue loss as consumption would fall further. They have also not forgotten to mention the usual argument of possible job loss. ISWAI represents alcohol industry giants such as Bacardi Limited, Beam Suntory Incorporated, Brown-Forman, Diageo, LVMH Moët Hennessy, and Pernod Ricard – the who is who of the multinational liquor trade. Among the members of CIABC is Radico Khaitan Pvt Ltd. Together, these front groups and liquor producers are mounting an aggressive lobbying onslaught.
This stance shows that the alcohol industry is well aware of the state’s dependence on alcohol revenue. However what is missing in this argument is that any revenue from alcohol is dwarfed by the cost of alcohol harm in West Bengal.
Tax increases are recommended by the World Health Organization (WHO) as one of the best buy policy solutions to prevent and reduce alcohol harm. However, it is recommended to be implemented in an integrated way with other measures such as reducing availability as part of a package to maximize the impact for health and development promotion.
Another argument of Big Alcohol is that higher taxes and higher prices of alcohol will lead to cross-border trade and illicit alcohol. The answer to this is to enforce existing laws strictly, not reducing alcohol prices.
India needs alcohol control policy coherence
West Bengal is severely affected by alcohol harm. It is the second leading state for children reporting alcohol use, with almost 4% of children using alcohol. It is also the sixth leading state for people needing treatment for alcohol use disorders. 29% of men in West Bengal are current alcohol user, another worrying figure in the context of India, where neighboring states such as Bihar (1.7%) and Gujarat (7.2%) have much lower alcohol use prevalence.
But India’s alcohol burden is not limited to one state, across the country Indians suffer from alcohol harm ranging from poverty to violence.
- According to the report by the Ministry of Social Justice, cited above, a third of Indian men consume alcohol. As per WHO estimates, 11% of Indians are binge alcohol users.
- A recent study of alcohol consumption in 189 countries between 1990 and 2017 found that consumption in India had grown by 38% – from 4.3 litres a year per adult to 5.9 litres.
- The cost of alcohol far outweighs the revenue from alcohol. 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).
India’s alcohol control policy is currently in the purview of each state. Much of the harm and problems arising with differing laws in different states can be resolved by implementing a comprehensive national alcohol control policy which is uniform across states.
Business Standard: “Liquor associations warn against proposed tax hikes in West Bengal“
National Herald: “Alcohol and Bengalis: A troubled relationship“
The Economic Times: “Liquor companies introduce smaller packs to drive sales amid the pandemic“