The Kerala State Beverages Corporation, or BEVCO as many know it, is flying high this festive season. All thanks to an impressive start to the 2026 Onam liquor sales. However, will it be enough to pare the losses?
The state-owned liquor distributor recorded a massive turnover of around ₹233 crore from August 18 to 20, up by 11 per cent from about ₹210 crore in sales registered during the first three days of the 2025 Onam season.
Onam season is a significant contributor to the agency’s overall collection. BEVCO sold liquor worth more than ₹970 crore during the previous Onam season.
Despite such impressive sales, BEVCO incurred a loss of ₹180 crore in 2025. According to Excise Minister M Liju, a sharp increase from 5 paise to ₹10 in gallonage fee wiped out all profits, and the agency had to pay around ₹400 crore to the government.
For the year 2025-26, the state collected around ₹21,130 crore from liquor sales, out of which ₹18,675 crore was collected as tax.
To put this into perspective, the tax amounts to almost 12 per cent of the total revenue receipts of ₹1,52,351 crore in FY 2025-26. Maximum revenue is from high demand for Indian Made Foreign Liquor, which is taxed at a flat rate of 251 per cent.
Similar to Karnataka’s tax slab system based on Alcohol-By-Volume, the new Kerala state government has introduced a tiered sales tax structure with lower tax slabs for low-alcohol alternatives. Hence, revenue from other categories is lower.
Discussions on the state’s liquor policy will take place post-Onam and are expected to be completed within a week in September.
Local media has connected the soaring sales to Operation Toofan, Kerala’s statewide anti-narcotic enforcement campaign. A senior police official, in an interview with an outlet, hinted that the effectiveness of Operation Toofan led those unable to access drugs to turn to alcohol.
Kerala levies some of the highest alcohol taxes in the country, and the agency is a primary driver of state revenue, contributing a significant amount to the total tax collection.
Meanwhile, the police and excise departments have intensified their crackdown on illicit liquor and drunk driving as part of a special Onam drive that began on August 1.
Illegal brewing, strictly prohibited under the Kerala Abkari Act, continues to predominate in several regions in the State. The department has strengthened surveillance around toddy parlours, as chances of adulteration have heightened during the festive season.
