Rahul Mehta Gandhinagar LsCandidate
How Ministers and owners of liquor companies gang up to keep liquor prices high?
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The price of almost 100% pure ethanol is no more than rs 40 per liter at theanol factories, which make ethanol from sugar. And many sources of ethanol such as taadi, mahua are even cheaper !! Most beers has 10% to 20% ethanol at most. So cost price of beer is no more than Rs 5 per liter to Rs 10 per liter. Now raw cost price of some liquor can be expensive - such as wine etc as their prepartion methods are expensive.
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Then why is cheapest beer also so expensive? One reason is almost 200% taxes. But even that doesnt explain costs. 200% tax should take the cost of Rs 5 to Rs 15 . To that add, all commissions of wholesalers and retailers. Even that would not take costs to Rs 100, if market was competivve.
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The prices are high due to licensing.
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The Ministers issue license to manufacture liquor to a small number of company-owners. These company-owners form nexuses and decide a bottom price and a self imposed quota to keep that price very high. So supply of liquor is ARTIFICIALLY lowered to keep prices high !!!
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This generates huge profits for companies for NO competive work on side. Profits are good, but if and only there is some real competitive work done on side. eg companies like Intel , Microsoft, Google, Havmor, Nirula etc all make profits. But then they do some real work on side. If their profits are bburden, then their real work is asset to all. Here , the Ministers and owners of liquor making companies only do deal-cutting , and thus make super-profits, without doing any real hard work. IOW, they only create burden and create no asset worth the burden.
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The solution I propose is complete delicensing of all liquor companies, where liquor is legal. If a state has made liquor illegal, then its another issue. But is liquor is legal in a state, then the producer should only need a registration and no license. In addition, laws related to "branding" should be simplified so that it becomes easy for a person to obtain a brandname. All these laws can be printed in Gazette by TCP (see section-1.3 of rahulmehta . com / 301.htm ).
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