Wednesday, 24 August 2011

Tepid Beer

Here is an example of how corruption starts. Anti corruption sentiments are high in India these days , as any Indian reader would know.  This blogger, trying to be apolitical, steers clear of any comment on the movement launched by Anna Hazare. But an instance of how a warped economic policy breeds corruption would be entirely appropriate for this blog.

The state of Andhra Pradesh is the largest beer market in India.This would not be surprising to readers with some knowledge of the state. Its is a large state with lots of people. It is also "blessed" with one of the hottest climes in the country. Naturally a cold beer would be very welcomed by many.

Unfortunately the neta babu raj is very much alive and kicking in the beer industry in Andhra Pradesh. The government decides what brands of beer you can buy, from whom and at what price. A very worthy organisation called the Andhra Pradesh Beverages Corporation Ltd  exists staffed by Ramamrithams of all shapes and hues. They tender for all the beer to be sold in the state and decide how much is to be bought from each company.

Some years back United Breweries (Vijay Mallya's company) and SAB Miller (a global giant) virtually sold all of the beer in the state. A year back government policy changed stating that they would buy beer from companies in the proportion of their national market share (only a Ramamritham can think like this). This massacred SAB Miller and benefited UB hugely - ( for sake of absolute clarity let me categorically state that I am not implying that UB had any say in this decision). Recently, the policy got reversed, benefiting SAB Miller (ditto clarification regarding any influence of SAB Miller in this decision)

What is the government doing deciding whose beer you should drink. Its none of its business. Hasn't it heard of consumer preference, supply and demand, etc etc. Why is beer any different from the hundreds of products that are bought and sold daily. There is some mistaken belief that the government should protect its citizens from the harmful effects of liquor consumption (??) and that is best achieved by controlling it. Quite apart from it being nonsensical thinking, government control is the surest way to drive bootlegging underground and spark the all too frequent illicit liquor tragedy. 

There is every temptation in an environment like this for normal commercial decisions to be taken on criteria other than economic. Why leave this window for corruption? The state of Andhra Pradesh has many issues confronting it. It needs to address so many problems. Production, distribution and pricing of beer is not one of them. Governments should get out of normal commercial activity. Let the market decide.

Corruption is a many headed hydra. Effective policing is one aspect of the solution and can be a good deterrent. Eliminating an environment that breeds corruption is also equally important.

13 comments:

  1. Anonymous24/8/11

    We do appreciate there is some annaiya who worries about our plight. We do hope that it goes viral in the social media. We would also like to assure you we will whole heartedly support if some one starts a binge mela protesting this.
    Thanking you from the bottom of the beer barrel-Secretary, Andhra Pradesh Beverage Consumer Association

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  2. kiwibloke24/8/11

    Once upon a time in the mid/late 90s Andhra had this ridiculous thing called "prohibition". My better half (Who was then not yet my better half!) used to run three restaurants in the sheraton and used to palm off somthing called near beer to the unsuspecting (including yours truly). It was a plain and simple concoction of apple juice (for the color) and soda (for the froth!)

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  3. @Anon - Ha Ha

    @kiwi - Don't tell me N wooed you with apple juice :):)

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  4. Every thing is for sale. Nothing is sacrosanct. Our politicians and civil servants are all pigs with snouts in the trough. I do not approve of the Hazare tactics from a constitutional viewpoint, but only if people take control of the way the politicians behave will things change.

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  5. @Ravi - Alas, its not only the politicians or bureaucrats at fault. Its an ill that permeates every aspect of our society. The average citizen is equally at fault.

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  6. I totally agree this was ridiculous basket management by the government obstructing with the free markets...

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  7. I am surprised at myself and people like us at large

    when i read your post, the first reaction was -

    how it stinks every where

    and then take a step back, didnt i know this. of course it is good to know from a general knowledge perspective that there is a restrictive beer policy in Andhra (and as ever - you have enlightened with an amazingly different facet), but is there a merit to the underlying emotions, and the anger and the sentiments.

    Havent i chosen this myself. As long as i am able to go to work every day, doesnt matter about the poorly laid roads by the contractors who bribed back half the contract cost (, as long as i can buy a seat for my kid in the school that i wanted, as i long as i can pay that small under the table bribe and register my little home in the registrar office (not to mention the black money) and as long as i get away with every thing that i get away with... does it matter to me.

    I dont think we have a right to complain and blame of the stink around us unless we chose to do something about it. we can of course talk about it and feel sad about it and that is what we all do exceptionally well.

    your home, your society, your country is what you make of it.

    But i also appreciate that due to various circumstances, aspirations and personal choices, we dont have the bandwidth to go beyond this.
    i couldnt even stand out for that 30 mins of human chain outside my office because tehre was a visitor in the office that i had to attend.

    so we pay the price. we are equally responsible is my view.

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  8. I totally agree with your comment to Ravi that it is so easy to identify corruption with others, be it politicians, govt employees, and maybe the scale of the problem is bigger in these cases. But given the current zero tolerance mood in india towards corruption, every Indian needs to take a cold hard look at themselves to see how we can move to a corruption free culture.

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  9. @Prats - Yes. I can understand governmens wanting to interfere in matters of public interest, like say arms. But beer ????

    @J - Unfortunately so. The problem is a degradation of moral values. Thats not easy to fix at all.

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  10. @Sandhya - You touch on an important point - citizen apathy or indiference, but I would argue that citizen activism is not to be expected. The job of a citizen is to get on with his normal life - not necessarily agitate for a cause. Where I fault the citizen is the all too willingness to pay or receive a bribe or bend the law when it comes to a personal matter but expect everybody else to be squeaky clean.

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  11. sarakku industry ,,be it govt sponsored or private me the no likes..least bothered with who gets what. If iam the FM..i wud increase taxes on dhammu and thanni so much that people would need to work more to pay and would still drink less and smoke less.

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  12. Why would a Ramamritham do this if there is no benefit involved for him? I find hard to digest Ramamritham doing something for no vested interest especially when it comes to policing something.

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  13. @gilsu - Why you no like ??? Konchum champagne kodukkatuma. Grape juice than saar. Won't tell amma :)

    @Vishal - Sometimes even clean Ramamrithams do such nonsense on their illusion that , but for them, the world would go to pieces.

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