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''Says ultimate loser is the stateand debt-ridden population''

By Chandeepa WettasingheIllegal alcohol manufacture is continuing to thrive with the aid of public officials as the state refuses to take action against provided information, said Distilleries Company of Sri Lanka PLC (DCSL) Chairman Harry Jayawardene.
“We are sorry to witness the continuation of unfair and illegal practices in the industry, taking place under the very nose of the enforcement authorities,” the business magnate said in his annual review this week.
Illegally manufactured alcohol is sold up to 30 to 40 percent cheaper in than legal alcohol in certain areas due to having no tax or quality standard requirements.
Further, most such illegal distilling is done with sub-par material; ensuring most of the income translates to profit while further endangering consumer health.
“Such businesses are carried out with the help of the officers of the state acting on behalf of these criminal parties instead of defending state laws. DCSL has brought these issues to the notice of the regulator,” Jayawardene said.
The ultimate loser is the state, and the debt-ridden population.
“What is perplexing is the fact that the state refuses to intervene, despite losing millions of rupees in excise taxes due to these players who evade such taxes through various devious means,” he said. Former Finance Minister Ravi Karunanayake recently noted that the Excise Department revenue nearly tripled to Rs. 9 billion since the rainbow coalition’s takeover in January.
Industry experts say that the duties collected remain below half of that of a properly regulated industry.
Jayawardene said that in addition to illegal manufacture, the Excise Notification 926 which granted the transfer of manufacturing licences for Rs. 1.5 billion and retailing licences for Rs. 200,000 is allowing certain parties to unlawfully control the entire supply chain, thereby allowing the safe transportation and marketing of illegal alcohol.
“Some manufacturers have taken over 233 retail licenses out of a total of 1000, approximately 23 percent, which indicates how rampant corruption has spread like a disease in the sector,” he said.
He added that such manufacturers are planning to purchase the remaining retail licenses at exorbitant prices to deprive the state of further revenue.

‘‘What is perplexing is the fact that the state refuses to intervene, despite losing millions of rupees in excise taxes''

Jayawardene delved into the hot topic of politicians importing ethanol—the key ingredient in alcohol manufacture—illegally.  “A new breed of unscrupulous traders has emerged in the recent past. With the help of law makers, they import ethanol under the guise of other products and thereby flood the market. Law makers also became producers, and sadly, the department tasked with policing the industry also helps such people to produce tax unpaid liquor,” he said.
Meanwhile, he said that the traditional toddy suppliers are in dire straits due to the manufacture of cheap artificial toddy which is unsafe for human consumption. “We are single-handedly nurturing the traditional toddy tapping custom although only a handful of such genuine tappers remain in existence. Even though we lack trained toddy tappers, the Department of Excise is not focusing  on this issue to help the industry and to ensure the production of genuine coconut toddy,” he said.