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Kathmandu Monday August 27, 2001 Bhadra 11, 2058.
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Liquor truce: Will it lead to more harm than good?
By Bhaskar Sharma
KATHMANDU, Aug 26 – While agreement on liquor sales hammered out
yesterday by the
government and the Maoist-affiliated women’s group has kicked off a raging debate, at
least one good thing has come out of it: there is finally a legal drinking age in the
country where once there was none.
But that is only one aspect. Another is the unfortunate message the agreement
sends: that the government will not do anything until pressure is applied on it, in this
case, extreme pressure in the form of explicit threats.
For that is exactly how the All Nepal Women’s Association
(Revolutionary) got the mighty government down on its knees. It threatened a nation-wide
liquor ban, allowed its supporters to go on a rampage in Nepalgunj and Birtamod, all in
the name of fulfilling its myriad demands.
Be that as it may, the focus is now on the finer points of the agreement
itself which includes not only the setting of a legal drinking age (24 years), but also
proposed zoning laws that would limit alcohol sales to particular areas, drastically
reduce the number of alcohol sale outlets, and a ban on advertising of alcohol both in the
print and electronic media.
While social groups and non-governmental organizations have hailed the
last-minute truce as a "socially responsible" measure long overdue, the private
sector is intensely worried. For them, the agreement is proof enough of the
government’s failure to protect investments. In this case, billions of rupees worth
of investments.
"There was a need to regulate liquor sales, but not in this
manner," says Ramesh Kumar Shrestha, President of Beverages and Cigarettes
Association. "The voice of the business community should have been respected. The
present announcements are against the essence of business."
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the
apex body of the business community, has expressed utter anguish over the
government’s decision. "FNCCI’s stand is not against the need to regulate
liquor sales, but against the ad hoc manner in which the government took the
decisions," Bhaskar Raj Rajkarnikar, spokesperson of FNCCI said.
He also informed that FNCCI’s views were not incorporated in the
government’s decision. The decision was taken only bilaterally amongst the government
and the ANWA, leaving the aggrieved party, the private sector, out of it, he charged.
Entrepreneurs say that the steps announced by the government would not serve
the purpose for which it was taken. ANWA-Revolutionary had demanded complete ban in the
sale and distribution of liquor arguing that it is the root cause of social evil.
"The agreement will not be able to wipe out social problems. Rather, the
announcement will lead to black marketing and corruption, as politics will make way into
the issuance of licenses for liquor manufacturing and opening of retail outlets,"
said Rajendra Kumar Khetan, managing director of Gorkha Brewery Pvt. Ltd., Nepal’s
largest brewery.
Khetan may have a point. The US experience, where alcohol was banned during
what is called the Prohibition era (in the 1920s and 1930s), led to the rise of gangsters
and crime syndicates, notably of Al Capone in Chicago. Closer to home in India, where
several states either ban or severely restrict the consumption and sale of alcohol,
gangsterism and crime is still rife.
It is for these reasons that yesterday’s agreement to curtail sales and
distribution of alcohol could ironically do more harm than good.
The economic harm is certain to be the most severe. More than Rs 12 billion
is already invested in the brewing and distilling industries of Nepal which directly and
indirectly provide employment to 50,000-100,000 people. The hoteling, advertising and
packaging industries and the distribution channels, including the sugarcane farmers, are
certain to bear the brunt of the agreement. Molasses, a byproduct of the sugar mills, is a
major input for the liquor industry.
Moreover, an estimated 30,000 retailers and over 40,000 food outlets
(restaurants and bars) in the country would be affected by the decision. Furthermore, the
government would lose revenue by almost 50 per cent. The government presently collects
revenue of around Rs 5 billion from the liquor business.
Although it is too early to obtain estimates of the decision’s monetary
impact on the various sectors, the ban on advertisement of liquor would erode over 30 per
cent of the Rs 2 billion advertisement industry’s turnover, said Rajkarnikar, who is
also the President of Advertising Agencies Association of Nepal.
There are five breweries and 30 distilleries. Furthermore, statistics show
that the production of the liquor has doubled over the last ten years. Experts say along
with it, the consumption too has increased. Tourists consume 40 percent of the liquor and
locals consume the rest, according to estimates.
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