Thiruvananthapuram: The price of FMFL (foreign-made foreign liquor) in Kerala will increase by 11-12 per cent from October 3.

Even though the government had allowed Bevco (Kerala State Beverages Corporation), which controls liquor sales in the state, to increase the prices of FMFL by 26 per cent, the corporation decided to settle for a reduced margin.

Earlier, the government had approved Bevco’s proposal to increase the warehouse margin from 5 to 14 per cent and the shop margin to 20 per cent. However, Bevco decided to increase the shop margin only to six per cent, while hiking the warehouse margin to 14 per cent.

Bevco collects nine per cent as warehouse margin and 20 per cent as shop margin on selling IMFL (Indian-made foreign liquor). Based on this rate, a hike in the margins of FMFL was also proposed, which would have caused the prices to increase by 26 per cent. However, as FMFL constitutes a tiny – 0.25 per cent – of the total liquor sales in Kerala, Bevco gave a concession on shop margin. Moreover, FMFL is not a major source of revenue for Bevco.

At the same time, the organization of liquor manufacturers has demanded the withdrawal of the hike in margin. “While the government will not gain much from the increase in margin, it will deal a big blow to consumers and manufacturers,” said CEO of the International Spirits and Wines Association of India Nita Kapoor and its general secretary Suresh Menon.

Meanwhile, the Kerala Government has also increased the margin on foreign-made wine by five to six per cent.