Liquor R(h)ush: Why Sikkim’s liquor business is faring differently than the rest of India


When different states of India hefted the impediment on alcohol sales and buying, Indian public went berserk. It is not a far-flung statement but a verity, which facts and figures back. Overcrowding and interminable queues in front of recently opened liquor shops across India were a clear visual delineation, to say the least. On the first day, Uttar Pradesh sold Rs 100 crore worth of alcohol.

A whopping 70 per cent COVID tax on liquor didn’t seem to deter buyers from swarming up at almost 150 government-run alcohol shops, it wasn’t unusual as usually, Delhi makes up to Rs 3,500 crore per month from liquor sales. Karnataka made a record sale of Rs 197 crore, on a Tuesday giving a new meaning to turning it up on a Tuesday. Maharashtra wasn’t far from it, 3 days after Maharashtra permitted home delivery of alcohol to prevent overcrowding 5,434 orders were placed in Maharashtra on the first day. The reasons are fairly obvious as India’s state together earned about 2.25 trillion INR from taxes on alcohol in the most recent fiscal year.

A police officer tries to control a crowd outside a liquor store in India’s capital, New Delhi Credit: Adnan Abidi/Reuters

A video, which went viral, of a man on the streets of Delhi showering flower petals to the people standing on liquor shop queues saying, “You are the economy of the country. You are saving the economy of the country (in lockdown)”, made a statement about how much alcohol, however evil it may be deemed to be, contributed to the economy. It also went to show that alcohol has indubitably become a mainstay of the economy. After almost 6 weeks of lockdown, the opening of liquor shops begets many varied reactions, presumably, no soul in India had expected that it would be sort of a linchpin to India’s economic revival. Excise duty on alcohol makes up a third of any state’s tax revenues for states such as Karnataka, West Bengal and Uttar Pradesh, the income from alcohol is even higher.  

In Sikkim, alcohol has been in tradition and in cultures, where many ethnicities casually use alcohol as an alternative to tea in households, served to guests or used in trivial commencements. According to the National Family Health Survey (NFHS) 2015-16, in India, the figure for women who drink alcohol is significantly lower, at 1.2%, and only two states where this number exceeds 10% (Sikkim and Arunachal Pradesh). However, as alcohol and economy go, the buying factor isn’t big, as most alcohol-economy symbiosis comes from the production. With many breweries producing in Sikkim, about 60% of the consumption is done by the tourists. 

“The sales have gone down in lockdown, while we used to sell 22-25 thousand petis liquor, each peti containing about 9 litres, and almost 35 thousand petis in peak tourist seasons and festivals, it has gone down to 14-15 thousand,” says Narendra Tyagi, CEO of Kanchenjunga Distilleries.

Source: Facebook

Tyagi speaks how most of their sales come from tourists buying the liquor in Sikkim and how the setback in tourism has adversely affected the business.

“We crunched the numbers and found out that mostly if it was 100 per cent sales, it has gone down to 40 per cent, so 60 per cent of our buyers were tourists.”

Anand Prasad, an FL shop owner at Lal Bazaar, Gangtok also stresses the same, of how tourism and hotel businesses have been the backbone for liquor business.

“The business is down, and since the tourists are less there isn’t much to go about, at first when the government gave us the green signal there was a tangible 2-3 days rush, but now it is down. We also normally sell to hotels but they’re also closed, so yeah,” says Prasad.

“Maybe it is because the economy is also down and people do not have money to spare on alcohol,” he adds.

The scene is a little different in rural areas where locals brew and sell alcohol and chhang made from Rice, Millet, Maize, etc., the surveys and rural interviews brought the fact of people still going normally about their liquor businesses in the areas. While bottles of these varied beverages are normally sold at Rs 40-80 per bottle, depending on the type and strength of the liquor, there hasn’t been a tangible difference in the consumption or the buying and selling matrices of the rural areas.

A couple from Marchak, East Sikkim, who sell these beverages at their village say, “Well first of all, we do not own any license and I feel like most in villages seldom do, speaking about the more remote areas, we sell “Local” (Alcohol made by fermented Millet/Rice) at Rs 60 per bottle, so people are still buying in the same rate. The only difference is that in the lockdown a few people came in cars and took a few bottles, that rarely happens around here, the passers mostly go to homes (which sell the liquor) near the roads.”

A rural shopkeeper from Poklok Kamrang says, “We serve chaang (made with millets, maize, or rice), kodo ko jaar (brewed using finger millets), bhaati jaar(brewed with the help of fermented rice), Local, and some beer that we bring from the market, though the beer stocks quickly finish we can replenish our stock. There’s not a lot of difference here in the lockdown, the local drunks, occasional others, and some youngsters buy from us, same as usual.”

 Though rural areas haven’t felt any losses since the margin for loss/gain in the business is lesser, the bigger breweries and FL shops throughout the state have seemingly faced a blow. The state government has been helpful to the workers in the sector by providing lenient relaxations to the vendors and some relief to the workers. 

“The government has been helpful to give out a relief of Rs 300/ day as a package to our workers,” says Tyagi.

“The biggest blows may be faced by the scrap workers, who have no means to move the waste we produce to Siliguri which is the nearest city the scrap is taken to, even our scrap has been dormant in our warehouses.”

Sikkim has had it a little different than rest of India when it comes to the liquor business in lockdown, though not anywhere near irreversible losses, there is a hint of a mismatch in the situations, with imports, exports, and the more percentage of consumers being out of the state. Understanding the crisis and its indifference throughout the world, the stakeholders whose businesses not only are limited to Sikkim, send out the sentiment which is positive toward compliance of the no-movement through the state boundaries, and also being patient in the dry period of tourism.

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