Kerala Chief Minister Pinarayi Vijayan on Thursday swatted aside allegations of corruption in the permission granted to Oasis Commercial Pvt Ltd to start brewery operations at Elappully panchayat in Palakkad.

"There is nothing suspicious about this," the Chief Minister said while replying to the discussion on the Governor's address in the Assembly on Thursday. Pinarayi said the government had strictly played by the book and had not done anything that went against Kerala's Excise Policy.

Former opposition leader Ramesh Chennithala raised the issue in the Assembly on January 22. He termed the permission granted to Oasis "favouritism and nepotism that amounted to corruption" and wanted it withdrawn.

He, along with Opposition Leader VD Satheesan, called the company "shady and dubious" and said it was involved in the Delhi liquor scam and was caught polluting groundwater in Punjab.

No trespass of law
The Chief Minister quoted from the preface of the Kerala Excise Policy 2023-24. It says that the raw material for manufacturing Indian Manufactured Foreign Liquor (IMFL) - ENA (Extra Neutral Alcohol) - is fully imported into the state. Further, it states that liquor units outside the state make a substantial portion of the IMFL manufactured in Kerala through tie-ups with distilleries in Kerala. This, the policy says, is draining money out of Kerala. Then, it says the only way out is to increase the production of IMFL and beer in existing units and open new units.

The policy also states that the manufacturing of Extra Neutral Alcohol in Kerala would be encouraged. Distilleries and units that come forward with this objective would be granted permission, Pinarayi quoted the policy as saying.

Further, he said that the previous 2022-23 Excise Policy had noted that those eligible as per existing rules would be granted brewery licences. He added that the policy also does not speak about a tender process.

"What more clarification do you need," he said. "Whatever has been declared in the government policy are there to be implemented," he said.

In response, Chennithala said that the policy the CM read out were changes made to facilitate Oasis's entry. "You tried in 2018 and failed. Then you brought about certain policy changes and made it happen now," he said.

Chennithala was referring to the first Pinarayi ministry's decision to sanction three breweries and a distillery in dead secrecy. Ten, Chennithala's objections had forced the government to back out of the move.

Is there a need for tender
While levelling the charges, Chennithala had said that the government had not invited tenders before granting permission to Oasis.

The CM said a tender process was not valid in this case. He said that, as it stands, 10 distilleries, two blending units and two breweries are operational in Kerala. "Of the 10 distilleries, seven were started when the UDF was in power. The two breweries were also started by Congress governments. Were any of these started after floating tenders? Industrial investments are not invited through tenders. There are no competition-related issues involved in such investments, and therefore, a tender process is irrelevant," he said, and added: "If more investors approach with such beneficial project proposals, the government would only be happy to encourage them."

What makes Oasis special
"Oasis Commercial Pvt Ltd is the only company in Kerala that had been shortlisted by the Centre for the production of ethanol required for oil companies. This selection was carried out through a transparent process," the CM said.
On January 22, while raising the issue in the Assembly, Chennithala had pointed out that the LDF government in 1999 had taken a policy decision against the internal production of liquor.

The Chief Minister said that though it was officially decided to prohibit liquor production in 1999 (during E K Nayanar's tenure), liquor manufacturing plants were opened in Kerala even after that; in 2000 (when the Nayanar ministry was still in place) two blending and bottling plants had begun operations, and it was in 2003 that Malabar Brewery Beer began in Thrissur. Further, the CM said that Palakkad Malabar Distillery was given permission in 2022 to start a blending unit.
"This makes it clear that the 1999 order was specific to that period," the CM said.

Maharashtra-Karnataka connection
According to excide Department figures, 39.55 crore litres of ENA and ethanol had reached Kerala in 2024. Of this 9.21 crore litre ENA was for distilleries, 30.28 crore litre ethanol was for oil companies, and the rest was 8.34 lakh litres of industrial spirit.

"More than half of this was imported from Maharashtra and Karnataka. This way more than Rs 3000 crore flows from Kerala to other states. The transportation charge alone would be Rs 400 crore, at the average transportation charge of Rs 10 per litre. If manufacturing is done in Kerala, the transportation cost could be slashed to Rs 2 a litre. Under this head alone, Rs 300 crore could be saved," he said.

In this argument, there was an implication that Chennithala and the Congress were working for liquor lobbies in Karnataka and Maharashtra.

Status of Elappully brewery
"It is up to the government to accept or reject the proposal. Now, we have given only preliminary sanction. At this stage, the panchayat need not be consulted," the CM said..
Further approvals will be granted through the 'Ease of Doing Business' single window system.

The Chief Minister said the brewery project envisages an investment of Rs 600 crore. Once fully operational, it would give direct employment to 650 and indirect employment for 2000.

Water trouble
The plant would require 50,000 litres in the first stage and 5 lakh litres when fully operational.

In the application submitted to the government, it is said that this would be made available through Kerala Water Authority and rainwater harvesting. The KWA water would be pumped through the Kinfra line.

Problem is, the KWA line had still not reached Kanjikode Kinfra. "The work is in progress. When the line is fully laid, the company will be provided water," the CM said.

As it stands, the Kanjikode Kinfra provides 8 lakh litres of water daily to units operating within it.

"It is not a crime to provide water to industrial units. Water can be given to them after meeting the needs of drinking and irrigation," the CM said, trying to neutralise the charge that the plant would worsen the water scarcity in Elappully region.

Chennithala had earlier said that the proposed Kinfra arrangement was impractical as it unable to provide water for the production of a popular liquor brand like 'Jawan' made in Malabar Distillery. The CM said that 'Jawan' was manufactured in Tiruvalla Travancore Sugars and not in Malabar Distillery. "There is no water shortage in Tiruvalla Sugars. The production of 'Jawan' has been disrupted for a time because of the non-availability of ethanol," he said.

Zero waste project
The proposed plant is a 'zero waste' unit. "The government will ensure that no effluent is discharged from the plant.
The company's technology has secured the clearance of the National Green Tribunal and the Ministry of Environment and Forests. Operations will begin only after the company submits environment clearance.