Trade: Alcohol imports last year soared by almost Nu 100M (million) after the government lifted the ban on import of alcohol soon after it came to office, Bhutan trade statistics show. In 2014, a total of Nu 301M was spent on importing 3.3M liters of alcohol.
In January last year, the cabinet, after examining the recommendation of the multi-sectoral task force, lifted the ban that the former government had imposed for almost two years.
According to the Cabinet, the restrictions did not serve the intended purpose, and weren’t in line with bilateral and regional trading arrangements.
The Cabinet said the ban was only effective for the common business people and not for the government agencies and high-end hotels, and that senior government officials could buy all the alcohol they wanted.
While the ban may not have been effective in terms of consumption, it had impacted the spending on alcohol import.
In 2011, a total of Nu 580M was spent to import 16.9M liters of alcohol into the country. After the ban was imposed in March 2012, alcohol import dropped to Nu 316.7M. The following year, it further declined to Nu 203.2M.
Director of department of revenue and customs, Yonten Namgyel, said all alcohol imports during the ban period pertained to two duty free shops, high-end hotels and those who had government approval.
“We didn’t allow any import, except for those who had approval, and those who were permitted to import,” he said.
If the ban was imposed in view of the rupee shortage and current account deficit, lifting it made sense, because in 2012, the total foreign currency reserve was at USD 694M, which rose to about USD 900M in November last year.
In terms of rupee reserve, in 2012 the central bank had to sell USD 200M from the foreign currency reserve to buy rupees. But last year the government had more than 15B as rupee reserve, although a major portion of the reserve is accounted for hydropower projects.
From the health perspective, even with the ban in place, alcohol-related deaths and cases did not change. The annual health bulletin, 2014, show that death due to alcohol kept increasing, and cases of alcohol-related diseases rose from 1,943 in 2010 to 2,631 in 2013.
Mental and behavioural disorder due to alcohol has also increased every year, with the highest number of cases, 774, reported last year.
Studies conducted by National Statistical Bureau (NSB) found that although, commercial alcoholic beverages are commonly available in the country, home brews constitute the most popular drinks among the Bhutanese.
The Bhutan Living Standard Survey (2007) revealed that about 86 percent of the total alcohol consumed by Bhutanese was locally brewed.
NSB studies also stated that domestic liquor industry produced about 6.2M litres of alcoholic beverages in 2000, of which 4.9M litres were sold within the country.
In 2010, the annual domestic industrial liquor production rose to about 6.9M litres and domestic sales increased to about 6.7M litres. This means that about 97 percent of the total liquor produced domestically was sold within the country. In 2010 Bhutan’s per capita consumption for pure alcohol was more than eight litres.
Managing director of Army Welfare Project (AWP), Rinchen Yoezer said the project’s production has not changed much since 2010. “The alcohol import ban didn’t have much financial gains for the company since the production did not change,” he said.
Exports, the managing director said, have been increasing in the last few years and that sale in the domestic market has declined to about 85 percent.
Sources also said beer production had captured the entire domestic market during the ban period. However, officials from Bhutan Brewery pvt ltd, under the Tashi Group of Companies, were not available for comments.
While NSB studies confirmed that demand for local beer was growing in the Bhutanese market, annual production of the local beer industry rose from 8.4M litres in 2008 to 13.8M litres in 2010.
There are about 3,000 bars in Bhutan, of which more than 1,200 bars are in the capital alone. The government also spends over Nu 30M every year for referrals to treat alcohol related patients.
By Tshering Dorji