Kerala aims to boost liquor manufacturing

The Kerala government has announced a sweeping overhaul of its liquor policy, introducing significant changes aimed at increasing local production, enhancing regulatory transparency, and offering concessions to boost tourism and industrial engagement.

Under the revised policy, the state will allow a greater number of Indian-Made Foreign Liquor (IMFL) and beer manufacturing units, including distilleries, breweries, and spirits manufacturing in a bid to reduce dependency on other states for liquor production.

One of the key decisions includes legitimising the controversial liquor manufacturing centre in Elappully, Palakkad. The new guidelines allow qualified applicants such as the Elappully facility to apply for setting up distilleries and breweries. This development follows the second Pinarayi Vijayan-led government’s efforts to clarify procedural ambiguities left unresolved during its first term.

Building upon previous year’s provisions, the policy officially permits the establishment of units for the production of extra neutral alcohol. Furthermore, liquor service is now authorised within industrial parks, an extension of a similar facility already approved for IT parks under the 2022–23 policy.

In a move to support the hospitality sector, a one-day special permit system has been introduced to allow alcohol service on dry days. Three-star hotels and above, as well as heritage and classic resorts, can now apply for permits to serve liquor on the first day of each month for events such as business meetings, international conferences, and other gatherings. The application, subject to a fee of ₹50,000, must be filed at least seven days in advance. However, this concession is not extended to other dry days.

The updated policy has also granted the Kerala State Beverages Corporation permission to export liquor to Lakshadweep, though this will come with increased taxation on exported alcohol. Bottles sold by the Corporation will now require mandatory QR codes to ensure better tracking and transparency.

Responding to a long-standing request from The Kerala Toddy Industry Development Board, the policy now allows for the export of bottled palm wine (toddy). However, the government declined the proposal to reduce the legal distance between toddy shops and places of worship or schools from 400 to 150 metres. The cap on daily toddy extraction from a coconut tree, currently at two litres, may also be revised under the new rules.

Tourism is expected to benefit from the policy shift as well, with liquor now permitted to be served on luxury cruises. The Nefertiti Cruise has already been granted special permission for this.

Additional reforms include streamlined regulations for bar ownership. Bars will no longer require prior approval from the Excise Department to change their board or partnership structure but must notify the department within a month, failing which fines will be imposed. However, the government has not approved the proposal to extend bar operating hours by an hour at night.

Lastly, the policy clarifies and affirms the rules for liquor service in IT and industrial parks, allowing for the serving of alcohol in these locations. While it was announced in the previous policy, the implementation had stalled due to a lack of clear guidelines. Controversy continues around outsourcing liquor outlets within IT parks, with a final decision yet to be made.