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‘The Youth will be finished’

Supreme Court on illicit liquor related deaths

• Spurious liquor claims over 50 lives in Bihar

• Bihar Chief Minister says no compensation to families of victims

• Supreme Court pulls up Punjab Government for illicit liquor trade

Illicit liquor deaths in India are not uncommon. The 50 plus deaths in Bihar due to consumption of spurious liquor has sparked off a debate on prohibition too, vigilance, affordability etc. The stance taken by the Bihar Chief Minister, Nitish Kumar that ‘jo piyega, woh marega’ has been criticised by the opposition saying that instead of cracking down heavily on those manufacturing spurious liquor, the Chief Minister is taking a high moral stance.

Not just the youth will be finished, but all those who consume illicit liquor will end up in a mess. Even while the Supreme Court made the remark recently on the flourishing illicit liquor trade in Punjab, in Bihar, where prohibition is in place, the death toll due to consumption of illicit liquor had crossed 50 at the time of writing. The deaths were reported from Saran district.

The Chief Minister of Bihar, Nitish Kumar is obstinate about continuing prohibition, despite the frequency of deaths due to illicit liquor. He said in Hindi ‘Jo piyega, woh marega’ (one who drinks, will die) and added that prohibition had helped so many families. The Chief Minister categorically stated that no compensation would be paid to the families of those who had died in the liquor tragedy.

To boot Bihar has a Minister for Prohibition and Excise, Sunil Kumar who dismissed the tragedy, stating that “Rumours are being spread by some political parties or people with vested personal or political interest that hooch tragedies are happening in the state because of prohibition. We want to clarify that hooch incidents have no relation with the ban on liquor.”

Sunil Kumar, Minister for Prohibition and Excise

The Chief Minister said, “Even when there was no liquor ban here, people died due to spurious liquor – even in other states. People should be alert. As there is a liquor ban here, something spurious will be sold due to which people die. Liquor is bad and shouldn’t be consumed.”

Prohibition gives room for illicit trade

Deaths due to consumption of illicit liquor is a common phenomenon in Bihar and elsewhere too, but the governments are turning a blind eye to the situation. Earlier in March this year, 42 persons died and in 2021 the number of deaths reported due to illicit liquor consumption was 95 in Bihar. It was in 2016, Nitish Kumar who has been Chief Minister for seven times, introduced prohibition, taking a high moral ground and termed all those who drink as ‘mahapaapis’ (great sinners) and ‘not Hindustani’ which as head of state did not augur well for a trade which, besides adding to most State coffers, has evolved itself with great responsibility and sophistication. Yes, there are black sheep that run the illicit trade, which can be weeded out jointly by the industry and regulators.

The tragedy has led to war of words and the opposition, particularly BJP, has got a handle to drub the government on how prohibition has not only failed, but also led to rise in illicit liquor trade. The Union Minister for Panchayati Raj Giriraj Singh has urged Nitish Kumar to reconsider the prohibition policy, claiming that it has failed in checking illegal sale of spurious liquor, resulting in frequent deaths, and a rise in crime linked to it.

Last year alone from January 2021 to October 2021, the Bihar government registered a total of 49,900 cases in different districts after conducting special raids under the State Prohibition and Excise (Amendment) Act-2018. It seized a total of 38,72,645 litres of illicit liquor. The Bihar Police in an official statement had mentioned that a total of 12,93,229 litres of country liquor and 25,79,415 litres of foreign liquor was recovered and confiscated in the state.

During the operation, 62,140 accused were arrested and 12,200 vehicles were confiscated. Of the total accused, 1,590 people arrested did not belong to the state. The five districts, which were on top in terms of liquor seizure were Vaishali with 45,63,59 litres of liquor, Patna with 35,00,85 litres, Muzaffarpur with 25,64,80 litres, Aurangabad with 23,25,42 litres and Madhubani with 22,37,67 litres. The five districts, which were on top in terms of arrests are Patna with 6855 arrests, followed by Saran (3872), Motihari (2832), Nawada (2814) and Muzaffarpur (2660). With mounting opposition, the Bihar Chief Minister has asked his officials to arrest the ‘big fish’ involved in manufacture of spurious liquor.

Nearly 4 lakh violators languishing in jails

As per media reports from Bihar, nearly 4 lakh people have been arrested under the prohibition law since April 2016, leading to crowded jails and courts which are stressed dealing with such cases. Most of those arrested are poor, unable to afford bail. Despite this, the illicit trade keeps attracting people into the network of clandestine trade.

With so many arrests and many of them languishing jails, while the big fish go scot-free, the Nitish Kumar government has proposed amendment to the Bihar Prohibition and Excise Act, 2016. The proposal is to give a ‘second chance’ to violators rather than punishing them straightaway.

Illegal ‘bhattis’ keep mushrooming

Bihar, Gujarat, Mizoram and Nagaland are the states where prohibition is in force and deaths due to illicit liquor consumption is not surprising. And Punjab where liquor consumption is high, illicit liquor trade is thriving and the Supreme Court recently castigated the government on how such trade was destroying the social fabric. A bench of justices M R Shah and C T Ravikumar asked the Punjab government to spell out specific steps taken to curb the production and sale of illegal liquor. Senior advocate Ajit Kumar Sinha, appearing for the Punjab government, assured the court that the state is taking action and had already destroyed over 13,000 illegal liquor ‘bhattis’ (distilleries).

“We are not concerned with A government or B government. So far as Punjab is concerned, the drugs problem is increasing. The youth will be finished. It is very unfortunate that this is happening. Who is the sufferer? The poor people. Illegal manufacture and transportation have to stop because it ultimately affects the health and the society,” the court observed.

36,000 FIRs registered in Punjab in two years

The top court was hearing a plea arising out of a September 2020 order of the Punjab and Haryana High Court that had disposed of a petition seeking transfer of some FIRs registered in Punjab in relation to distillation of spurious liquor, its sale and inter-state smuggling to the CBI. Sinha told the Supreme Court that over 36,000 FIRs had been registered in the last two years.

The bench pulled up the defence counsel stating “You (government) are only filing FIRs, but according to you in every gali and mohalla there is a ‘bhatti’.” “The state may also come out with a circular on effective investigation and enquiry…. that if any illegal bhatti is found, the concerned local police will be held responsible for not keeping a vigil,” the bench said. The apex court, which observed the poor were the worst sufferers of hooch tragedies, directed the Punjab Excise Department to apprise it about the particulars of certain FIRs that have been lodged.

The Punjab government’s excise department has filed an affidavit in the Supreme Court that it would introduce country liquor with an alcohol content of 40% as a ‘healthier alternative’ to illegally home-brewed liquor and spurious liquor. The Punjab government also told the court that an officer of the rank of Inspector General of Police would be deputed to investigate and monitor all cases registered under the Punjab Excise Act, 1914 and that circulars had been issued to all field units to ensure action against illegal liquor production and smuggling.

The petitioners had claimed in the high court that illegal distilleries and bottling plants mushroomed in the state where the liquor mafia continues to thrive. They also referred to the August 2020 hooch tragedy in Punjab where over 100 people had died owing to consumption of spurious liquor. There are hundreds of varieties of spurious liquor and they are sold under different names such as ‘Mahua’, ‘Narangi’, ‘Moonshine’, ‘Tarra’ etc. Most ‘bhattis’ make hooch using coarse Jaggery, local yeast extracted from plants, citrus peels from oranges, sweet lime, etc., and other fruits like wild berries, pears, apricot, peaches, water, methanol etc. are used. Further, it is reported that they add organic waste, dead rodents, lizards and battery acid to make it more potent.

782 deaths in India in 2021

Last year, India registered a total of 708 incidents of consumption of illicit/spurious liquor causing 782 deaths. The maximum such deaths were reported from Uttar Pradesh (137), followed by Punjab (127); Madhya Pradesh (108) and Karnataka (104). The problem is more of spurious liquor. However, industry experts believe that prohibition aids illicit liquor trade, but add that unless governments deal with a firm hand such trade, deaths are going to continue, prohibition or no prohibition. The contention of the industry is that by lifting prohibition, consumers are spoilt for choice and that in a way can bring down casualties.

Illicit liquor trade is big not just in India, but in many countries due to the moolah it brings in for those indulging in it. As per a report, the ASEAN countries are forecast to have the highest consumption of unrecorded alcohol by 2025. “Illicit alcohol accounts for 90% of the alcohol market in Indonesia and 85% of the market in Vietnam.

– R. Chandrakanth

Nepal bans import of liquor, among other items, to rein in economic crisis

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India’s neighbours – Sri Lanka and Nepal – are in deep economic crisis. The crisis is a bit similar as both countries largely depend on revenues from tourism and that was severely affected due to the pandemic. Unlike Sri Lanka, Nepal is not that debt-ridden. Nevertheless, the Himalayan country is witnessing unprecedented inflation and its economy is just rolling down the mountains with no immediate relief in sight.

Hence, the Nepal Government headed by Sher Bahadur Deuba has initiated certain measures, including ban on imported cars, liquor, playing cards and nearly a dozen other “non-essential” goods to address the widening trade deficit and declining foreign currency reserves. Nepal’s central bank has said reserves are only sufficient to cover just over six months of imports, down from 10 months in mid-2021. The Finance Minister Janardhan Sharma has stated that the situation is nothing like Sri Lanka’s and that Nepal is in a “slightly better position” than Colombo in terms of production and revenue. He admitted, that although the forex reserves are stressful due to escalated imports of luxury items, Nepal is not burdened with foreign debts like Sri Lanka. Nepal’s trade deficit rose by nearly 34.5% on-year to $9.35 billion in mid-March, while forex reserves have fallen below $10 billion. Hence, the ban on some imported goods, including liquor.

“This is a short-term measure taken to prevent the economic condition of the country from going bad,” said ministry joint secretary Narayan Prasad Regmi. “The government has decided to curb imports of certain luxurious and non-essential goods as the recent surge in imports has put pressure on our economy.” The central bank had already verbally directed private lenders not to issue letters of credit for luxury goods earlier in April.

India major exporter to Nepal

In 2020, Nepal imported $5.58M in hard liquor, becoming the 142nd largest importer of hard liquor in the world. In the same year, hard liquor was the 228th most imported product in Nepal and the imports are primarily from India ($2.64M), Singapore ($1.76M), United Arab Emirates ($786k), United Kingdom ($169k), and Malaysia ($140k).

While emergency restrictions on imports of high-end vehicles might temporarily bolster Nepal’s balance of payments, the fact that imported wines and spirits represent less than 0.2% of the country’s total import value suggests that the ban will have negligible economic impact, state some experts. The heavy taxes on imported wine and spirits generate almost $55 million in the form of excise and customs,

The fear is that ban on imported liquor may lead to ‘bootlegging’. Nepal has a significant informal alcohol market. According to research by the World Health Organisation and the Nepal Health Research Council, at least 66% of all alcohol consumed in Nepal was either illegal or home-produced, making for an illicit market that is more than twice the size of the legal market.

Experts said that prohibiting the import of international spirits and wines will only compound this problem, increasing the share of illicit alternatives through smuggling across borders into Nepal and counterfeiting of popular, premium international brands.

Local brews

Locally, Nepal is known for some brews that mostly are made in homes. Rakshi is the Nepali term for a traditional distilled alcoholic beverage. Its alcohol content is around 45%. That is to say as a whiskey. Nepalese drink this homemade drink during the festivals.

Production and consumption of alcohol is controlled by the Madira Aain 2031. License is required to sell alcohol. However, it permits brewing and consumption for household purposes without a license. Gongo is made from scraps of ugali and maize, fermented over several days, and then distilled through a jerry-can of cold water into a soda bottle. This has hints of ethanol, but surprisingly palatable.

Tongba is the drink of the Limbu people of Eastern Nepal and also referred as Tibetan Hot Beer. And then there is Chaang which is made from a selection of cereals.

In 2020, Nepal exported $385k in hard liquor, making it the 123rd largest exporter of hard liquor in the world. During the same year, hard liquor was the 106th most exported product in Nepal. The main destination of hard liquor exports are to Japan ($231k), South Korea ($64.1k), Hong Kong ($53.6k), Macau ($20.4k), and Belgium ($13.5k).

The fastest growing export markets for hard liquor of Nepal between 2019 and 2020 were Macau ($20.4k), South Korea ($18.4k), and Japan ($8.41k).

ASCI bans surrogate advertising in IPL

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The Advertising Standards Council of India (ASCI) banned surrogate advertising of liquor during India’s showstopper event – Indian Premier League 2021 which however, got truncated, due to some players and franchise staff testing positive. Talks are on to hold the unfinished spectacle in the United Arab Emirates, like it did in 2020 without crowd attendance, to be viewed on a broadcast platform.

It was during 2020 IPL that surrogate advertising was active on television and digital medium, particularly OTT (over the top), the latter in the absence of clear guidelines. “The IPL broadcaster for TV has confirmed to the ASCI that all advertisements are checked for CBFC clearance so that they are not in violation of the Cable Television Networks (Regulation) Act, 1995 (CTNR). Keeping that in mind, the ASCI processed complaints on advertisements appearing in OTT, digital and print media,” ASCI said. The association suo motu took up 14 complaints and some of the advertisers withdrew the ads.

Brand extensions have some leeway

The CTNR rules prohibited the direct or indirect advertising of cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants in 2009. The Information & Broadcasting Ministry, however, allowed advertisements of products even if they shared a brand name with a liquor or tobacco product so long as it wasn’t a manifestation of the prohibited product. Advertisement of brand extensions of liquor and tobacco products is permitted under CTNR, provided the product sold under the brand extension does not make direct or indirect references to the prohibited product, it is distributed in reasonable quantity and is available in a substantial number of outlets, and the proposed expenditure on the advertisement of the brand extension product is not disproportionate to the actual sales turnover of that product.

ASCI guidelines for brand extensions

The Advertising Standards Council has ‘Guidelines for qualification of brand extension product or service’ wherein for an advertisement to qualify as a genuine brand extension advertisement (by implication, not surrogate), the in-store availability of the product sold must be at least 10% of the leading brand in the product category or sales turnover of the product must exceed `5 crores annually or `1 crore in the state where the product is distributed.

Age-old question, whether to allow liquor advertising or not?

However, the question that keeps raking up is an age-old issue – whether to allow liquor advertising / surrogate advertising or not? And the topic is universal leading to unending debates. Across continents, there are countries where liquor advertising is allowed and then there are as many countries that have banned / restricted advertising of alcoholic beverages. In the United States, spirits advertising has self-regulatory bodies that create standards for the ethical advertising of alcohol. In the UK, advertising for alcoholic drinks follows a code enforced by the Advertising Standards Authority, while the packaging and branding of the products is subject to self-regulation. In Thailand, alcohol advertisements are allowed but with a warning message. In South Korea, public advertising is allowed only after 10 p.m. In the Philippines, alcohol advertising comes with a disclaimer ‘Drink Responsibly’. In India, liquor advertising was banned after the Ministry of Health found that cigarettes and liquor had adverse effects on a person’s health. However, advertisements for liquor brand extensions can run on television only if they have a certificate from the Central Board of Film Certification. That led to the companies (manufacturers and also advertising agencies) becoming innovative with ‘surrogate advertising’ wherein unrelated products with the same brand name is manufactured / advertised and sold, only to ensure that the liquor brand name stays right on top of consumers’ minds. Unrelated products include mineral water, music CDs, soda, sports accessories and anything that can be advertised.

Active on digital media

The question here is when liquor companies are active on social media which is a major influencer, an indisputable force and not to mention its enormous reach, the whole idea of banning on OTT and television smacks of hypocrisy. It is indeed paradoxical that excise which is one of the top revenue earners for most states, going up to 15 % of the overall revenues, is not allowed to be promoted. There is a school of thought that believes if a product is allowed to be manufactured and sold, it should be allowed to be advertised, but that is over simplification as it will certainly be like opening up the Pandora’s Box.Gokul Krishnamoorthy who worked with an agency that handled United Breweries in an opinionated article in the Financial Express says “While ASCI banning surrogate ads by liquor brands during the curtailed IPL 2021 was a welcome move, it prompted a question in many minds. What explains the existence of a team called ‘Royal Challengers Bangalore’? One can’t help but remember that the current captain of the team Virat Kohli is idolised by a young boy in a health beverage commercial, among many others. Royal Challenge is a brand of whisky owned by United Spirits, which also owns the Royal Challengers Bangalore cricket team. If scale of presence, volume of advertising, market share and the likes are the key metrics by which one decides whether or not an alcohol brand can advertise its extension, then Royal Challengers Bangalore has no problem at all.” He goes on to add “The only seeming solution then, albeit rather simplistic and overarching, is that if a brand is present in a category where promotion is banned, it should not be allowed to promote itself in any context. It should be denied the right to promotion, whether for its shared corporate brand, for its extension, for its event, for its cricket team or whatever else.” Since such conundrums exist, there are those who feel that we need to shed this hypocrisy and accept that people do drink and reaching them is a legitimate part of a company’s business plans. The companies should be allowed to promote safe, moderate and responsible drinking. In states where there is prohibition this issue does not crop up at all. With digital media coming into play, some players have been advertising brand extensions as the CTNR does not apply to advertisements over the internet. This is changing as we have seen the government bringing social media under control. The digital medium is pretty nascent and governments are grappling with policies to rein in the medium. Indian liquor companies have been using social media to promote their brands. The UB Group recently tied up with a digital content company which produced a web series titled ‘Pitchers’, a five-part series on four friends trying to launch a start-up. With over 10 million viewers, the show got a rating of 9.7 out of 10 on internet movie database website, making the new concept of advertising, going beyond surrogate advertising. As rules become stricter, liquor brands will look at different channels – events, experiential, branded content and in-film, like ‘Pitchers’. As manufacturers need to advertise, one way or the other as to get their products sold, they have been innovative in how to get the message across.