Wednesday, January 6, 2010


This is a stub. Will be adding more data soon. I felt I had to post this partial entry today.

Our President (Pratibha Patil) today expressed dismay about rampant alcoholism in Kerala. She was surprised that a state so highly placed on social indicators (health/Quality of life/Literacy etc.) could be like this.

Yes Ms. President. Mals had overtaken Sardars years back in per capita alcohol consumption- and since then, there's been no turning back. Sustained growth of 20% + year. Successive governments raised prices at every opportunity with the stated objective of discouraging this practice (More revenues for the govt. is an unproven allegation). The governments knew the mallu psyche. They worked harder each day to keep up with this government sponsored inflation of an essential commodity.

And here we are. This year booze revnues are expected to touch 5,600 crores ($1.25 billion) - from Beverages corporation alone. Beverages Corp. is the state sponsored alcohol wholesale monopoly. Add the bar revenues, sides (Pepsi, soda, chips, pickles, mutta puzhungiyathu etc.), tips, Toddy revenues, Military canteen flow, cigarettes, smuggling, illegal arrack packets etc. this figure could be anywhere close to 10,000 crores. 2010 we will touch 12-15k confidently, whether the economy recovers or not. That's something like 2-2.5 billion dollars. Come to think about it, the world's tallest skyscraper cost $1.5 billion. Mallus could quit drinking in 2011 and make two towers like that (one in Chaalakkudi and one in TVM), and name them Burj-alc-OC and Burj-alc-Honeybee, and still have change for a few beers per head.

Artist's impression of Burj-alc-OC - look at the sun setting a-la-Dubai(partial image courtesy

Economics of Drinking
Because of the high prices, we have to work harder than the rest of India to make the money to drink. That hard work ensures that we always operate on the efficient production possibilities frontier (and on some days like Onam and Xmas, we push the frontier a bit, violating one of the holy theorems in Economics). This Xmas, this tiny state sang Hallelujah with 28 crore worth of booze - Santa must have had a tough time asking for directions.

I have a suggestion. List Beverages Corp on the stock exchanges. Trust me, the high-seeking mallus will ensure that it trades at stratospheric valuations.
I'm already drooling at the idea of the ever-elusive perfect hedge. Buy a full bottle and hedge it with stocks in this company. As a clan, spend money and drink in peace, while you watch your investment grow.
Watch out - this could be India's next big IPO. Hic Hic.

Soda theernnu. So vellam vechu adjust cheyyam, alle? Vellom theernna? Entherede, ini dry thanne saranam.

By the way raising such sin taxes is a global phenomenon. The Greek government recently increased taxes on alcohol and tobacco. From BBC: "The Finance Ministry said the measures would increase revenues. The Finance Ministry also said the increased taxes on alcohol and cigarettes would deter consumption, "to the benefit of public health"." Notice how every administration gives equal weightage to government wealth and public health.

Irony: Greek booze taxes are based on alcohol content. Higher kicks mean higher taxes.

Whatever said and done the Greeks better get their act together.


  1. Pinna alla! While not being a big fan of alcoholism, i see no contradiction in a developed state being the largest alcohol consumer. It may not be a coincidence that Indian states with high literacy, health and blah are in-fact leading. How could somebody expect a state to be at par with the developed nations in most other social indicators but not for alcoholism. Hello people! my message to you is, be healthy! .. and educated! .. like the people in US and Europe. But don't drink or make merry like them; live a low life, like how people live in Africa. It also rebukes claims that alcoholism and good health are mutually exclusive!

    You could also mention the additional revenue pouring in from the work surge of alcoholics as they play catch up.

  2. Adipoli picture.. literature vaayichilla.. nalla fit aanu. can't sit straight.