It is rather unfair on the part of the opponents and critics of the present regime in Tamil Nadu led by ‘mercurial’ madam Jayalalitha to call it a government working without setting any target and striving to achieve it and instead attempting to deal through ad hoc measures as and when problems surfaced.
Definitely whenever Jayalalitha & Co assume power, at least since 2001, they set certain targets to be achieved but surpass them with ease. Don’t be mistaken by the bogus claims of her henchmen who boast that their leader is determined to take Tamil Nadu to numero uno position in India in terms of development and progress and welfare of its people, and the self-claim of her that she is working for 20 hours a day for uplifting the State and its people from the morass they are in now to pinnacles of glory.
Then in what else have they achieved and surpassed the targets they fixed and took Tamil Nadu to numero uno position in the country?
They have taken TN to the unassailable top position in India in the sale and consumption of liquor with 17 percent of all liquor brands sold and consumed in the State. Why should the Jaya regime be so keen on liquor sales through State government owned TASMAC retail liquor outlets?
During her earlier regime between 2001 and 2006, the government took over retail sale of liquor and opened TASMC retail outlets in October 2003. Just a year earlier in October 2002, Midas Golden Distillery, owned by associates of Sasikala Natarajan, close confidante and housemate of Chief Minister Jayalalitha was established. There were allegations that most of the procurement of liquor brands by the TASMAC was from Midas Golden Distillery and resentment among customers that the brands of this distillery was forced on them as their preferred brands were not available in the retail outlets.
Earlier in 2006, when Jayalalitha was Chief Minister, Midas had been subjected to Income Tax raids on its premises. Jayalalitha accused the then Union Minister of State for Finance, SS Palanimanickam (DMK), of “exerting pressure” on the IT department against her and her associates. But, she had also denied that either she or Sasikala had been associated with Midas. This was akin to the Tamil saying ‘v§f¥g‹ FÂU¡FŸs Ïšiy’ (Our father is not hiding in silo). However, in a case in Madras High Court the petition was filed by one of the directors of the company Eravanan, a relative of Sasikala and who was all powerful till recently in the regime and ADMK until he was hounded by this regime along with M.Natarajan and later said to have struck a compromise in a meeting in Kodanad and spared, thus revealing the true ownership of the company.
DMK President Kalaignar on April 23, 2006 exposed with authentic details, Jayalalitha’s liquor scandal by which several thousand crore rupees of people’s money and Government revenue were looted by a distillery owned by the benamis of her associate Sasikala. The details given in the statement of Kalaignar were as follows:
“There were only five distilleries manufacturing Indian Made Foreign Liquor (IMFL) in Tamil Nadu during MGR rule and DMK rule, (viz) Mohan Breweries, Shiva, Distilleries, Balaji Distilleries, MP Distilleries and Segal Distilleries.Besides these five, one more distillery was started during the earlier tenure of Jayalalitha. Named as Midas Distilleries, it was owned by benamis of Sasikala.
When Kalaignar was the Chief Minister of Tamil Nadu, the proprietors of the above mentioned five distilleries approached him for permission to increase the productivity of their units which he refused.
Then one Jagannatha Mudaliar of Kancheepuram applied to Tamil Nadu Government for licence to start a distillery as the demand for IMFL was high in the State instead of permitting the existing units to increase their productivity. As there was a policy not to permit new units, the demand was turned down. But he approached the High Court and obtained permission. However, no objection certificate was not issued by the State Government. On coming to power, they bought the firm for a very low price, gave NOC and then started Midas Distilleries owned by benamis of Sasikala.
Besides, IMFL producing units, there were three beer manufacturing units: Mohan Breweries, Balaji Breweries and M.P.Breweries. The third unit (MP Breweries) was purchased for Sasikala by liquor baron Vijay Mallaiya as benami.
The Government determined the quantum of production each unit could produce per annum. The production limit fixed for these units were: Mohan Breweries 42 lakh cases, Shiva Distilleries 66 lakh cases, Balaji Distilleries 57 lakh cases, MP Distilleries 30 lakh cases, MGM Distilleries 30 lakh cases. But Midas Distilleries could produce any number of cases per annum. As per the rules, a committee should be set up and production limits were determined on the basis of its recommendations. But no such committee was set up so far. Why this discrimination? Why Midas was exempted from the conditions for other units? What is the reply of Jayalalitha regime for these exclusive concessions?
The Government supplied raw material (rectified Spirit) to IMFL manufacturing units. While the Government fixed the quantum of rectified spirit per annum for other units, the Midas was permitted to buy any amount of raw material without any ceiling. Why this discrimination? Why this exclusive right?
During DMK rule G.Os were issued every year on the supply of rectified spirit. The Government was giving permission in one G.O for the procurement of raw material needed for 12 months from April to March. But a change had been effected by ADMK Government. The earlier method was adopted for only one year (2001-02). But after their Midas unit was started, the order on supply of raw material was issued on quarterly basis, by which the production units were always under obligation to the rulers.
If any unit was found uncooperative, the Government would drag giving permission for procurement of raw material. Hence all of them were always obliged to the rulers and if any delay in giving permission was made, it would help increase the production of Midas. By adopting this tactics they succeeded to a great extent. Despite such delayed sanction of permission they were forced to squeeze out a rate for every litre and they had to meekly give the amount in order to get raw material.
During DMK rule these units could increase their productivity at will using the annual allotment of new material. If they manufacture twelve months production in 10 months, they could seek and obtain temporary permission for increasing their productivity. But under Jayalalitha’s dispensation, they had been fixed monthly targets facilitating the growth of Midas. This control was introduced only after Midas unit was set up.
Kalaignar demanded the ADMK government to release the quantum of annual production of Midas in a statement he released earlier but the Government had not released the details, and hence he had given it now.
In the year 2003-04, Midas sold liquor in 7, 48,638 cases. Till then the retail sales were in the hands of private individuals, who did not come forward to buy Midas products (as there were no takers in the market). Hence although Jayalalitha government under the guise of increasing Government revenue took over retail sales of IMFL, the real purpose was to dump the unsolicited Midas products in retail outlets through TASMAC and make huge profits. By this they could increase the sales of Midas unit from 7,48,000 cases in 2003-2004 to 28,50,095 cases in 2004-05. The fourfold increase in sales was due to Government undertaking retail sales. If the public asked for good and preferred brands of other firms, the stock reply was ‘No’ and Midas products were pushed in TASMAC retail outlets, resulting in a fourfold increase in one year.
In the year 2005-06 Midas increased the sales by eight times to 50,87,094 cases from a mere 7,48,000 cases in 2003-04.
Why did Jayalalitha regime give importance to Midas products and sell them exclusively? Was it to facilitate this that the retail sale of IMFL taken over by the Government? Was it not a crime to increase the sales and profits of their benami concernin the pretext of increasing Government revenue? Was it not a conspiracy to siphon off the entire sale of liquor to the coffers of their benamis?
Excise labels would be stuck on liquor bottles linking the bottle and cover. During the DMK rule, these labels were securely printed in Government presses. The manufacturing units would procure them on payment of excise duty, stuck on their products and sold them. But in Jayalalitha regime these labels were printed in private presses. While other units were getting them properly from Commissioner’s office by remitting money, Midas got them to some extent from the Commissioner’s office by paying money and they procure them in large measure from private presses without making any remittance, thus evading excise duty due to the Government. Thus they siphon off government revenue to the coffers of Midas firm.
When DMK was in power, there was a condition prohibiting loose sales of liquor by opening the covers of bottle and they had to be sold in tact. The condition was still in vogue. But now as the retail sale was done by Government owned shops, and loose sales carried out empty bottles were returned to the manufacturing units which reuse them and earn crores of rupees.
As the IMFL producing units were forced to grease the palms of rulers with Rs.20 lakhs if they ask for new brand labels, many of them did not apply for it. Although many of them had applied for it, they were refused permission because they failed to give the amount. But 20 new brand labels had been given to Midas alone. Was it not true?
In order to increase the sale of Midas products, liquor varieties imported from other States had been drastically reduced. While 3,20,234 cases were imported from other States in 2003-04, only 57, 649 cases were imported in 2005-06.
The units producing IMFL had to pay ‘gratification’ (to rulers) of commission of Rs.15/- per case for varieties like brandy, whisky, rum, and Rs.25/- per case for beer. Thus they get several crores as commission. “Some betrayers raise a hue and cry for the continuation of the rule of this gang of robbers. But can the plain minded Tamil people get hoodwinked?” Kalaignar asked then.”
In September 2006, tightening the screws on Midas Golden Distillery, the DMK government ordered closure of the unit and power cut for “violations” under Section 33A of the Water (Prevention & Control of Pollution Act).
However, responding to a petition filed by MRP Eraavanan, a director of the company, seeking to quash the August 24 closure order of the Tamil Nadu Pollution Control Board (TNPCB), the Madras High Court granted interim relief, directing the Board to file its counter by September 14.
In the State Assembly in May, Chief Minister Kalaignar, cited statistics on liquor procurement by TASMAC, to prove how Midas had been “preferred” over the distillers since its establishment in October 2002. He said the sale of Midas Golden distilleries rose from 12.85 lakh cases in 2003-04 to 28.68 lakh cases in 2004-05 and 51.04 lakh cases in 2005-6. The turnover jumped from Rs. 146 crore in 2003-4 to Rs. 400 crore in 2004-05 and to Rs. 600 crore in 2005-6. The District Environmental Engineer of the TNPCB issued a show-cause notice to Midas Distilleries in July, pointing to certain “deficiencies” such as excess production of liquor, discharge of sewage and absence of reverse osmosis plant on the premises
Taking exception to the allegation of ADMK general secretary Jayalalitha that Deputy Chief Minister M.K.Stalin and Rajya Sabha member Kanimozhi owned distilleries and that the TASMAC had placed huge orders for them, Chief Minister Kalaignar on July 3, 2010 dared the leader of Opposition to prove her charges.
Writing in ‘Murasoli’, Kalaignar said Jayalalitha should give details about the location of the distilleries owned by Stalin and Kanimozhi and the information about the orders placed by the State government for procuring Indian Made Foreign Liquor (IMFL) from them for sale in TASMAC. He said Jayalalitha had forced him to give details of the Midas Distillery, set up during her regime
Now, there seems to be return of the dragon of Midas monopoly and corruption in TASMAC procurements. According to the following report in ‘The Times of India’ on Jan 3,
“It may be the world’s largest alcoholic beverages company, but in Tamil Nadu, the country’s largest liquor market, Diageos United Spirits Ltd (USL) has been elbowed to a distant second place.
The Chennai-based Midas Golden Distillery has been beating the company hollow in the states tightly controlled liquor sector in the last few months. Sample this: In October 2013, Midas sold 10.4 lakh cases (nine litres make a case) to USLs 5.8 lakh cases.
Sales figures show Midas, a 11-year-old company reportedly owned by associates of Sasikala Natarajan, has emerged as the monarch of liquor trade in the State. Between May 2011 (when the ADMK swept back to power in the state) and October 2013,Midas orders have swelled from 4.14 lakh cases to 10.4 lakh cases. Interestingly, during the same period, USLs orders have fallen from 8.83 lakh cases to 5.8 lakh cases.
Local alcoholic beverages seem to be the flavour of the season with other homegrown brands too witnessing a growth. Kals Breweries is in the third place with orders for 5.05 lakh cases in October and Mohan Breweries received orders for 4.7 lakh cases.
Tamil Nadu, which accounts for 17% of national liquor sales estimated at 300 million cases annually, has a unique liquor marketing model and is the only state where manufacture and retail of different liquor brands is completely controlled by the state entity Tamil Nadu State Marketing Corporation (Tasmac).This is the reason why most MNC liquor brands,except Bacardi,do not have a presence in TNs mainstream market,other than in luxury hotels and high-end restaurants.
Decisions at Tasmac appear politically-driven. What else can explain the rise of Midas. Going by the orders, it appears that they (Midas) have something in the liquor trade which global leader Diageo does not have, an industry source said.
These changes in the dynamics of the liquor market come just when USL is exiting Tamil Nadu, handing over local manufacture and sale of its market-leading brands on a franchise agreement to Enrica Enterprises for Rs 125 crore.
Also, Tasmac recently came up with the concept of swanky premium retail outlets, which target elite customers and stock international brands which were unavailable at regular Tasmac shops. This would alter the market dynamics further since more premium liquor will be now officially available.
The situation in Tamil Nadu has changed dramatically, and hence, based on commercial considerations, we feel it is better to give it to someone else, USL managing director Ashok Capoor had earlier told TOI”.
In the meanwhile, an Indian Made Foreign Liquor manufacturer has filed a writ petition in the Madras High Court seeking a direction to the Tamil Nadu State Marketing Corporation (Tasmac) and the Tamil Nadu government among others to frame guidelines for placing supply orders and indent with foreign liquor manufacturers and fix a reasonable retail price to sell liquor brands without the element of profiteering. The guidelines should be framed on the basis of scientific and commercial data and consumer choice. A fair and transparent procedure should be adopted for placing the supply orders with manufacturers, including the petitioner.
Justice R.Subbiah ordered notice on the petition.
The petitioner, Golden Vats Pvt. Ltd., in Chennai, said its manufacturing unit was located at Karnavur, a remote village near Mannargudi in Tiruvarur district, a backward area. It submitted that the manufacturing cost had exceeded the price fixed by Tasmac, thereby the ordinary and medium brands were a loss to the petitioner.
Due to placing of orders of premium brands, the company was in a position to bear the loss. However, Tasmac had fixed the retail price which was 600 per cent more on the manufacturer’s price. This unchecked high retail price was passed on to consumers.
The company submitted that Tasmac had been purchasing IMFL from 11 license holders, including the company, by placing supply orders and later by lifting the stock by issuing indent. However, the fact remained that there was no rationale or basis for placing supply and indent orders with various manufacturers, and no fixed guidelines and orders, the petitioner said.
When the matter was taken up, senior counsel P Wilson told the bench that Tasmac’s retail profit margin was more than 600% and the unchecked high retail price pinched the common man’s pocket badly. Though Tamil Nadu had 11 distillery units, Tasmac placed substantial orders only with the favoured few and drastically reduced premium liquor off-take from others such as Golden Vats, he said.
In his petition, Velumani said Tasmac did not place enough indent with his company since July 2013. For the month of November 2013, no indent was issued at all. For December 2013 and January 2014, Tasmac placed orders for very little amount of liquor, he said, adding that from July to December 2013 he was able to get orders for only 28,300 cases of premium brands, whereas other distilleries received orders for about 10 lakh cases.
Noting that there are no guidelines or yardstick framed by the authorities to issue supply orders to manufacturers, the petition said proper guidelines on the basis of commercial and scientific data, and consumer choice should be framed immediately in a most transparent manner, to regulate purchasing premium brands. Likewise, while fixing the retail price, Tasmac can have a reasonable profit but cannot squeeze the pockets of consumers by keeping profit margins very high.
Velumani said Tasmac had been adopting an unfair trade practice and discriminatory methods from July 2013 to favour certain IMFL manufacturers, and wanted the court to direct the authorities to continue to issue supply order and indent till credible purchase guidelines are
framed.
As a whole, it is very clear that the only reason for which Jayalalitha is in politics and strives to come to power is not to serve the people of Tamil Nadu, as her credulous cadre are told and gullible people are made to believe, but to amass personal wealth by hook or by crook and the single-point agenda of her regime is to serve that interest!
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