No final decision yet on low-alcohol beverages, UDF will take final call after talks, says Kerala CM

Taking a U-turn on the proposal to reduce taxes for low-alcohol beverages, Kerala Chief Minister V.D. Satheesan on Wednesday said that the final decision to permit their sale rests entirely on a consensus within the ruling United Democratic Front (UDF).

Following intense backlash and allegations of benefiting liquor companies, the Chief Minister, while replying to the budget discussion in the state Assembly on Wednesday, announced that the final decision on implementation would be deferred for further consultations and consensus within the UDF coalition.

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“As for the liquor policy itself, that is a political decision. The UDF will discuss it internally, prepare a draft, consult all stakeholders and parties, and then arrive at a policy,” CM Satheesan said.

The Chief Minister underscored that the budgetary tax rates should not be construed as approval for selling low-alcohol drinks in Kerala.

“If the United Democratic Front (UDF) approves the sale of low-alcohol drinks after scheduled talks, the newly proposed budget tax rates will take effect. If the coalition opposes the move, they would not be sold. That is ultimately a political decision,” he said.

The Chief Minister also clarified that Excise Minister K. Liju has not expressed any dissatisfaction with the policy. It is indicated that the concerns raised by the Muslim League regarding the liquor tax will be discussed in the UDF committee in the coming days.

Defending the administrative step, Chief Minister Satheesan stated that the legislative groundwork for low-alcohol beverages was actually completed during the previous LDF regime. He clarified that the former Excise Minister, M.V. Govindan, had originally initiated the file processing and rule amendments regarding applications from brands like Bacardi. The current budget was simply rationalising the tax structures for an existing, un-notified category.

The newly formed UDF government’s revised Budget for 2026-27 introduced lower tax slabs for beverages containing 0.5% to 20% alcohol content. Items with 0.5%–10% alcohol would be taxed at 120%, while products with 10%–20% alcohol would attract a 175% tax. Currently, all Indian-Made Foreign Liquor (IMFL) carries a uniform 251% sales tax.

Following immense pressure, the Chief Minister retreated from immediate execution. He noted that the budget merely fixed the tax rates for a category created by the previous government, but its market rollout requires explicit political clearance.

The Left Democratic Front (LDF) Opposition, led by former Chief Minister Pinarayi Vijayan, fiercely opposed the tax cut. They claimed the policy was a “Bacardi Tax” designed to grant massive, unexpected profits to a private, multinational liquor company.

Senior leaders within the ruling Congress party, such as V.M. Sudheeran and AICC General Secretary K.C. Venugopal, openly criticised the move, warning that it contradicts the party’s anti-liquor stance.

Prominent Christian church bodies, the Kerala Catholic Bishops’ Council (KCBC) and coalition allies like the Indian Union Muslim League (IUML) strongly raised public health concerns regarding youth substance dependency.

The Chief Minister dismissed opposition claims about the privatisation of black sand as entirely false. Challenging critics to find any such mention in the budget, the CM accused them of spreading baseless lies.