Thiruvananthapuram: The Managing Director (MD) of Bevco has cautioned that if the heightened gallonage fee outlined in the budget remains unchanged, Bevco will face significant financial losses. The MD addressed a letter to Kerala’s Minister of Excise, MB Rajesh, conveying these concerns. The budget proposes a sharp increase in the gallonage fee, aiming to generate an additional revenue of Rs 300 crore. If this hike persists, Bevco will be compelled to raise liquor prices to sustain its operations.
The gallonage fee represents a tax paid by Bevco to the government for transporting liquor from warehouses to retail outlets. Previously set at Rs 5 per liter in the last fiscal year, it has now doubled to Rs 10 per liter. The MD highlighted that this increase would lead to a loss of Rs 300 crores for Bevco. Previously, Bevco paid Rs 1.25 crore as gallonage fee per financial year, but the introduction of the new rate will lead to the substantial loss mentioned.
Bevco relies on its profits to cover salaries and other benefits for its employees. A decline in profits will consequently impact these payments. To sustain operations, Bevco will be forced to raise alcohol prices, which may, in turn, adversely affect sales.
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