India pays dearly for cheap hooch
By Sudha Ramachandran
May 29, 2008
BANGALORE - A bootleg liquor tragedy in the southern Indian states of Karnataka and Tamil Nadu last week claimed the lives of over 180 people. At least 80 of the victims were from slums in Bangalore, capital of the state of Karnataka and India's technology hub. Another 30 were from rural suburbs around the city and the rest in neighboring districts. Deaths were reported from Tamil Nadu as well, mainly in districts bordering Bangalore.
The illicit liquor tragedy, among the worst in Karnataka in recent years, occurred in the midst of elections to the state assembly. In India, bars and shops selling liquor are shut during elections to avert brawls and maintain law and order, and to prevent politicians from handing out liquor to win votes. Politicians in India distribute liquor not only to win votes from the poor but also supply it to workers who help with campaigning.
With authorized shops shut, bootleggers, smelling opportunity, moved in. They stepped up production of illicitly brewed liquor (or hooch  as it is called by local English-speakers - in the Kannada language it is called batti sarai) and pushed sales in the slums.
Deaths from hooch are frequent in Indian villages and towns. The brew is often spiked with pesticides or chemicals like methyl alcohol and even battery acid to increase the kick. It is a lethal cocktail that causes blindness and damages vital organs resulting in death.
Bangalore has suffered several hooch tragedies. In 1981, 323 people died after consuming brew laced with poisonous chemicals. In April 2005, 22 people died after drinking the killer brew on the city's outskirts. Another major hooch tragedy happened in the city's Srirampura slum in 2006.
Most poor people drink arrack or country liquor, which used to be sold at about US$0.25 per 100 milliliters (ml)through government-licensed shops. Then in 2007, the Karnataka government banned the manufacture and sale of arrack , arguing that it was a financial drain on the poor.
In the run up to the ban, apprehensions were raised on two counts. One was that it would lead to a sharp fall in the state's revenue as cash from arrack sales accounted for 50% of the excise revenue. The other fear was that it would give a fillip to the manufacture and consumption of illicit liquor, as the poor would not be able to afford the higher priced, branded Indian Made Liquor (IML).
Still, the government went ahead with the ban.
With arrack off the shelves, drinking among the poor was not reduced. Arrack drinkers simply moved to IML or illicit liquor. What the ban on arrack did was to make poor consumers willing to fork out twice the amount for their daily drink. The cheapest brand of IML costs about $0.63 per 180 ml bottle.
Alongside the spurt in demand for IML, demand for illicit liquor too soared. Manufacture of illicit liquor skyrocketed. The tragedy was waiting to happen.
Karnataka's Excise Department officials and police claim they were vigilant and had registered about 1,000 cases against hooch brewers and confiscated some 47,484 liters since the ban in July.
But last week's tragedy indicates that they were not vigilant enough.
Following the 1981 tragedy, the government set up a commission of enquiry. An extensive probe followed and several bootleggers were held responsible for the tragedy. But no convictions were made.
That has been the experience in the scores of hooch tragedies that have followed since. The bootlegging business thrives under police protection and the patronage of politicians.
The tragedy, coming as it did in the middle of assembly elections, triggered the familiar political blame game. Politicians blamed Bharatiya Janata Party leader and Karnataka's new chief minister, B S Yediyurappa, for the tragedy, claiming that it was his decision to ban arrack that resulted in the growing demand for illicit liquor. Yediyurappa was deputy chief minister in charge of the excise portfolio and the architect of the arrack ban.
Following his party's victory in the election, Yediyurappa has announced that his government would not lift the arrack ban.
For the government, it does not make economic sense to do so.
Contrary to fears that the arrack ban would result in a dip in revenues, the move led to a spurt in IML sales which has more than made up for the fall in revenues from arrack.
The ban on arrack in July resulted in a sharp increase in the sale of IML. Sales doubled to over 3 million cases a month in Karnataka from an earlier 1.4 million cases.
In the year to March, 15.4 million cases of IML were sold. In the four months following the ban, the state saw sales of 11.1 million cases. In fact, by November, Karnataka toppled neighboring Andhra Pradesh to emerge as India's number one consumer of IML. Karnataka's population being far smaller than that of Andhra means that per capita consumption in Karnataka is far higher as well.
It is widely believed that the arrack ban was put in place under pressure from women's groups and religious institutions. However, liquor companies appear to have played a role in the decision.
Karnataka has a powerful liquor lobby. Liquor companies are known to donate massive amounts of money to political parties and in return manage to get industry-friendly policies in place. The Congress party is known to draw considerable support from arrack manufacturers and traders.
While the involvement of some liquor barons and bootleggers in politics is shadowy, two of Karnataka's biggest liquor barons openly participate in politics. Vijay Mallya, chairman of United Breweries, which enjoys a near monopoly over India's brewing market, is with the Janata Party and a member of India's Upper House of parliament. Hari Khoday of the Khoday Group launched his own political outfit in 2004. Bootlegger Marimuthu or the "Hooch Queen" as she proudly calls herself was until recently an elected member of the city council. She was among those named in connection with the 1981 hooch tragedy but was never convicted on any related charges.
The influence of the liquor lobby shrank somewhat in 2003 when the government stopped the sale of "seconds" - industry jargon which refers to the 70% of liquor that was being sold without payment of excise duties.
And in the years since, the liquor lobby's influence in politics has diminished, especially in comparison to that of the state's mining and real estate lobbies.
Still, its clout is considerable, as is that of the illicit liquor mafia, which is known to have close links with politicians and policemen.
With business booming after arrack was taken off the racks, neither the liquor barons nor the bootleggers will want to see the ban lifted. And with revenue pouring in from sale of IML, there is little reason for the government to lift the ban on arrack either.
The ban on arrack was ostensibly to help the poor. It didn't. It has resulted in draining their already limited income by pushing them to IML or put their health and lives at risk by driving them to illicit liquor.
1. Hooch: "cheap whiskey", 1897, shortened form of Hoochinoo (1877) "liquor made by Alaskan Indians", from the name of a native tribe in Alaska whose distilled liquor was a favorite with miners in 1898 Klondike gold rush; the tribe's name is from Tlingit Hutsnuwu, literally "grizzly bear fort". (Online Etymology Dictionary.)
Sudha Ramachandran is an independent journalist/researcher based in Bangalore.