Bihar's Liquor Industry Faces Political Fizz - Rediff

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Rediff.com » Business » Bihar's liquor industry faces political fizz

Bihar's liquor industry faces political fizz

October 25, 2015 11:39 IST

Through the past decade, Bihar’s revenue from liquor has quadrupled

henever he visits his company’s

brewery and packaging plant 39 km

from Patna, Karan Bilimoria, deputy

lieutenant of Greater London and

founder of Cobra Beer, is fond of

mentioning the fact that his father

was a serving officer in the

neighbouring Danapur cantonment.

While that helps remind everybody

about his ‘Bihar connection’,

Bilimoria and his peers in the state’s

liquor industry know they have to

learn to live with the political

minefield.

When Bilimoria set up shop in Bihar in 2008, several eyebrows were raised. Today, the unit is

so profitable that the company is slated to scale up production from 500,000 cases a month to

700,000 cases by 2016. And, the company, a joint venture with Molson Coors, is the fourth-

largest beer manufacturer in the world.

Through the past decade, Bihar’s revenue from liquor has quadrupled, hitting Rs 20,000 crore

(Rs 200 billion) this year. In election season, amid protests by locals over the easy availability

of liquor, the Nitish Kumar government in the state, along with several political parties, have

had to astutely recalibrate their position on liquor.

A single-lane road connects Bihta to Patna and its airport. “It used to be worse when we first

came in,” says a member of the senior management at Cobra Beer. The poor state of the road is

despite the fact that besides the Cobra Beer facility, two other breweries, of United Breweries

and Carlsberg, are also located on the same stretch of the Danapur-Khagaul road.

The completely mechanised Cobra Beer brewery is availing of a favourable liquor policy

unveiled by the Kumar-led government, as well as uninterrupted power supply.

“Beer brewing is an extremely power-intensive process; it needs to be fermented in tanks at

zero degree centigrade for 15 days. Uninterrupted power is essential. Thankfully, we have

never had to operate our generator sets here,” says the Cobra Beer official.

It was with an intention to attract investment that the Bharatiya Janata Party (BJP)’s Sushil

Kumar Modi, former finance minister of the state, had unveiled Bihar’s new liquor policy.

However, in a volte-face, the BJP, a former coalition partner in the government, has now

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spoken out against the relaxed policy.

The incentivised liquor policy has ensured even as the beer market grows about 10 per cent a

year in India, the growth in Bihar is 30 per cent.

The Cobra Beer unit produces the premium Carling brand, as well as the Iceberg 9000, the

Thunderbolt and the more popular Cobra Beer for the local market. As it can sell to the Bihar

State Beverages Corporation alone, maintaining cordial relations with the state government

and the bureaucracy is vital.

But the going may not be smooth.

Of late, villagers, especially women, have taken to the streets, demanding a stop to the

proliferating liquor stores. Ramashree Devi, 50, from Rana Bigha, speaks out against the

liquor shops in the vicinity. “I lost my husband to liquor 10 years ago and now, I don’t want to

see young lives snuffed out with easily available liquor.” Along with other women from

surrounding villages, she has led a protest march, blocking a highway.

Confronted by attacks from both locals and political opponents, Kumar has promised to

restrict opening of liquor shops in villages.

Though Cobra Beer claims it will be unaffected by any change in the political leadership,

insiders admit since the Janata Dal (United) parted ways with the BJP, the management has

been maintaining a distance from both parties. Bilimoria, “a friend” of Kumar, has stopped

dropping by at the state secretariat during his annual visits to Patna.

The story is no different for the few industries operating across the state, with industrialists

closely tracking the polls. Acquiring land continues to be a major roadblock to industrialisation

in Bihar; United Breweries, which was allotted land, is now facing problems securing

possession.

Low literacy levels and unskilled labour pose additional challenges for even a plant as

automated as the Cobra Beer unit.

The Rashtriya Janata Dal’s Bhai Birendra, the current MLA from Bihta, says, “The chief

minister has stated liquor shops will be restricted in villages. The government’s policy will

remain unchanged in urban areas.” On the fallout of such a policy on the state exchequer, he

says, “We will look at other revenue-generating options.”

Kavita Chowdhury in Bihta

Source:

Related News: Bihar, Bharatiya Janata Party, Sushil Kumar Modi, Karan Bilimoria, United Breweries

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Bihar's Liquor Industry Faces Political Fizz - Rediff