Citizens in Maharashtra may soon be able to say “cheers” to an enhanced taste of their favourite brand of liquor as the state government is planning to make it mandatory for liquor manufacturers to blend a certain percentage of grain-based alcohol in their products.

While boosting the dormant grain-based alcohol industry in Maharashtra, the state is looking at overcoming likely fluctuations in supply of molasses-based spirit for liquor manufacturers owing to distilleries diverting their stocks to oil marketing companies (OMCs) for blending ethanol in petrol.

Grain-based spirit is usually manufactured from maize and poor-quality or broken rice and jowar in Maharashtra. The proposed policy will cover country liquor (CL) and Indian-made foreign liquor (IMFL).

“Most of the grain-based distilleries in Maharashtra are shut. To revive them, we are planning to make it mandatory for liquor manufacturers to blend a certain percentage of grain-based spirits. The import duty on grain-based alcohol imported from other states will also be increased from the present 2 per litre to boost local industry,” said a senior state government official.

Of the 34 grain-based distilleries in Maharashtra, only around nine are operational. Compared to the installed capacity of around 40 crore litres, the production averaged at about 8-8.5 crore litres.

At present, manufacturers blend around 10% of grain-based spirits in their products, usually in premium brands, and the state plans to eventually increase this to around 40-50%.

“With sugar mills and distilleries getting good rates from OMCs for ethanol blending in petrol, and the cyclical nature of the sugarcane crop, it is necessary to push the production of grain-based alcohol in Maharashtra,” the official explained.

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He added that though liquor prices could increase marginally, state excise revenues would also rise as the duty formula is based on cost of manufacturing. Farmers can also get better prices for their produce.

“Increasing the blending of grain-based alcohol will improve the taste and quality… It will reduce our dependence on molasses and help launch new brands,” said a liquor manufacturer. He added that as of now only a couple of multinationals manufacture their entire portfolio using grain-based spirits.

Nationalist Congress Party (NCP) legislator Mansingrao Naik, who controls a co-operative sugar mill and operates a private grain-based alcohol unit in Sangli, said only around three grain-based distilleries were operating at optimum capacity due to lack of demand.

“Unlike foreign countries, where liquor is distilled from grain, India has molasses-based products. Grain-based liquor is considered to be healthier than that using molasses,” he explained.

He added that sugar factories found it remunerative to sell molasses for fuel blending, and hence, the demand for grain alcohol was likely to rise in the future. But the prices of molasses-based alcohol sold to liquor manufacturers were marginally lower, around 50 per litre, compared to around 53-54 for grain spirits.

However, manufacture of grain-based spirit is a controversial issue in Maharashtra. The erstwhile Vilasrao Deshmukh government had launched a short-lived scheme—Food Grain-Based Distillery and Integrated Unit Financial Aid, 2007— to promote grain-based distilleries. This had raised the hackles of activists, who questioned the logic of diverting food-grains for producing liquor in a state that is food-deficit with endemic malnutrition and drought. The Comptroller and Auditor General (CAG) had also red-flagged lacunae in the scheme.

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Valsa Nair Singh, principal secretary, state excise, denied comment on the contours of the policy.

In 2020-21, around 320 million litres of CL were sold in Maharashtra, followed by beer (300 million litres), IMFL (200 million litres) and wine (7 million litres).

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