• Liquor consumers pledge temperance to oppose most-recent ‘unfair’ tax hike, depriving the Govt. of much-needed revenue

The Excise duty on all types of liquor, wine, and beer was increased by 20% with effect from midnight of 3 January. This was after another price hike which came into effect in October 2022. Speaking to The Morning, several liquor consumers said they are ready to be the newest challengers of increased taxation in the midst of the economic downturn. 

Increased prices, decreased consumption

The direct result of increased alcohol and cigarette prices is decreased consumption, which shows signs, as The Morning learnt, of becoming more prevalent than in the case of the previous price hike. According to consumers, in a context where the prices of all basic goods have increased, they see quitting, rather than reducing, the consumption of alcohol and cigarettes as the most prudent move. 

Speaking to The Morning, 39-year-old private bus driver Chanaka Perera (name changed on request), expressed these opinions, stressing that liquor prices are no longer manageable with other expenses. He said: “Opting for cheaper types of liquor or reducing the consumption of the same is out of the question. My economic situation is such that completely quitting liquor is the only way I can manage my expenses with my income. 

“The last price hike, which occurred several months ago, was like a warning. When that happened, in order to ensure that I have sufficient money to fulfil my financial obligations as the breadwinner of my family, I took a decision to control my liquor consumption-related habits and to quit liquor if the prices were further increased even by even Rs. 1. That was because I knew that there is a certain extent to which I can continue to consume liquor even after the price was increased. This is the limit. It will take some time, but, I am a very determined person, and I can certainly quit liquor.” 

He added that several friends of his, who are also private bus drivers, have completely stopped consuming liquor, while some have started consuming illegal liquor.

Meanwhile, several persons that spoke with The Morning, including a labourer, a teacher, a private sector employee, and a businessman raised similar concerns. They also see quitting alcohol, at least temporarily, to be in their best interests and as the best available option at the moment.

Thirty-two-year-old communication professional R. Thiran Oshada explained these sentiments: “I do not think it is possible to justify this price hike merely because it was a few hundred rupees in the case of liquor and a few rupees in the case of cigarettes. We cannot forget that this was done just a few months after the last price hike and at a time when the prices of everything else have also gone up. I advise everyone to quit liquor and cigarettes or to, at the bare minimum, cut down consumption by half, at least for a few months. It will help them save some money for other expenses while delivering a message to the Government that the people are not ready to accept unfair price hikes without resistance.”

This is in a context where the consumption of liquor has decreased by around 20-30% after the previous price hike.

Boycotting liquor

Oshada’s request to the people is a sentiment that seems to be getting some attention on social media platforms. Following the most recent price hike, members of a number of social media groups on liquor and cigarettes advocated for the same. Many members of such groups proposed that those who consume alcohol and cigarettes completely stop purchasing those products in order to show the authorities, the Government, and liquor and cigarette producers that unfair price hikes are not welcome. 

Several comments on such social media groups and posts read: “It matters not how badly you want to drink or smoke. Quit liquor and cigarettes for a month, and they (a reference to liquor and cigarette manufacturers and sellers) will have to reduce prices like biscuit companies did (a reference to the recent biscuit price decrease after many consumers stopped purchasing biscuits).” 

“If you want to drink, drink some illegal liquor for the time being. Do not give liquor stores, liquor companies, and the Government the pleasure of being in a position to tax you whenever they want, when we are already paying taxes, unlike the consumers of any other goods.” 

“We (alcohol and cigarette consumers) were always treated as second-class citizens merely because those products cause health issues and are considered nonessential and antisocial. That should not give them (a reference to liquor and cigarette manufacturers, sellers, and the authorities) the right to treat us like an inferior segment of consumers that could be taxed limitlessly. We pay a massive amount of taxes. So, we have every right to object to unfair tax and price hikes.” 

Illegal liquor vs. legal liquor

As was mentioned above, there is now an increased tendency among liquor consumers to consume illegal liquor. However, this tendency is not confined to consumption. Social media posts examined by The Morning show how certain consumers have started manufacturing their own illegal liquor at home, in response to the recent price increase. Even though it remains to be seen as to whether those products are for sale or for individual or domestic consumption, it is notable that such acts seem to receive more praise than opposition. One comment on a post that supposedly showed illegally manufactured liquor read: “Like you (a reference to liquor consumers) focused on home gardening when the food prices increased, now it is time to be innovative and manufacture your own liquor to survive unfairly increased liquor prices.”

However, not every alcohol consumer views illegal liquor as a solution to the increased liquor prices. Some think that it is an imprudent move, mainly due to health concerns. In this regard, 47-year-old broker Samith Jayagama, told The Morning: “I do not think that consuming illegal liquor is a solution to increased liquor prices. The price increase was merely Rs. 200-300. While I too wish that the liquor prices were not increased within such a short period of time since the last price increase, Rs. 200-300 is not a big amount which a liquor consumer cannot afford, considering how much they have had to spend on other consumer goods. I think that people should not take risky decisions such as consuming illegal liquor just to save Rs. 200-300 per bottle. If they have to deal with health complications due to illegal liquor, which is not uncommon at all, they will have to spend way more money than what they save.” 

A tendency to consume illegal liquor in response to increased liquor prices, Jayagama added, is tantamount to putting one’s life in danger expecting to hurt the Government and liquor producers. He further opined that the best response to new liquor prices would be to either cut down on consumption or quit liquor.

When queried as to whether an increase in illegal liquor-related raids has been observed, Excise Department Deputy Commissioner Kapila Kumarasinghe told The Morning that price increases of any goods prompt consumers to opt for cheaper alternatives and that it is possible in the case of liquor too. However, no statistics in that regard were available at the time of writing this article. 

Meanwhile, 55-year-old mobile phone accessories seller R.K. Yogarajah raised concerns that increased liquor and cigarette prices would create or strengthen the existing, illegally imported or manufactured liquor or cigarettes in the country. 

“I am not a liquor or cigarette consumer. However, it is obvious that when legally obtainable goods become expensive, especially in this economy, people tend to obtain cheaper alternatives irrespective of their legal status. This is not a matter of liquor or cigarettes. This is applicable to any good. Therefore, I think that the Government should be concerned, if it in fact cares about the people, that making any goods unaffordable opens doors to cheaper and unsafe alternatives. In the case of liquor and cigarettes, this issue could be more serious, because of the inherent health risks and illegal rackets associated with those goods. It is a risk that the Government and other relevant authorities have to be vigilant about.”