All bars in Kerala will remain indefinitely shut starting from Monday, in protest against a decision by the Kerala State Beverages Corporation Limiter or Bevco to increase their wholesale profit margin on the sale of liquor provided to consumerfed and bar hotels from its warehouses. The profit margin has been increased from 8% to 20% and 25% on the sale of liquor from Bevco’s warehouses to bars and the consumerfed. However, the bars have not been allowed to increase retail prices on sale of liquor, despite this increase in profit margin. This has led the bar owners to protest, as the move will eat into their profits.

According to reports, the government had allowed bars to sell liquor as take away since June 17. However the purchase rate of alcohol for bars was higher than its MRP, forcing bars to sell their liquor at a loss. For the lowest priced rum, the purchase rate for the bar is Rs 611 per bottle while it’s MRP is fixed at Rs 600. Pointing out that it is the buyer who eventually pays the high tab, an office bearer said that Bevco buys the liquor at a much lower rate and sells it to bars at a wholesale price including taxes and profits.

Speaking to the media, office bearers of the Federation of Kerala Hotels Association said that Bevco’s decision will negatively affect hotel bars as it will lead to a significant drop in their profit margins. They also said that it would be tough to run the bars with these profit margins in a scenario where the bars are already hit hard by the pandemic. The federation has approached the state government, which has assured that it will look into the concerns of bar owners. Until the government takes action on the issue, the federation has decided to stop the sale of liquor from bars in Kerala.