13 December, 2017

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Liquor Tax: Beer vs. Kasippu – Learning From The Moonshine Menace Of The USA

By Tharosa Missaka Rajaratne –

Tharosa Missaka Rajaratne

The Budget-2018 has proposed revision of liquor tax based on alcohol content and thus beer and Wine prices come down significantly against the hard liquor. Two schools of thoughts have arisen in this phenomenon. First one is that the well-known Sri Lankan illegal brew ‘Kasippu’ consumers would shift to beer which is good for health. The other is that the youngsters would become alcoholic due to cheap liquor like beer and wine avail. As each theory has its own merit and demerit the debate continues interestingly without seeing an end to it. The ‘moonshine’ phenomenon of the USA in 1920s is a case in point for Sri Lanka in this context.

‘Moonshine’ is an equivalent to the well known Sri Lankan illegal brew ‘Kasippu’. Moonshine was first spotted in the 1920s in consequence of the prohibition of liquor in the United States. Household violence had direct connection to alcoholism and thus it had become a widespread issue in the society. This was first brought to light by religious movements and soon it snowballed as many groups put their strength together to support ‘an alcohol-free America’. As a result, the National Alcohol Prohibition act of 1919 was passed and the entire nation went out of liquor by January 17th, 1920. The ban seemed successful at the beginning but before long it produced evils.

While the prohibition was effective on the working class poor, the well-to-do class carved their ways around the law. The rich started stockpiling alcohol for ‘legal home consumption’ before the act went into effect. The Act allowed the doctors and pharmacists to prescribe ‘medicinal alcohol’ to their patients. During the first six months of prohibition, over 15,000 doctors and 57,000 pharmacists obtained license to prescribe medicinal alcohol. Grape juice was not restricted as it did not contain alcohol naturally by the time it was produced. However, farmers later learned how to ferment their grape juice for sixty days, which turned the juice into wine with a12% of alcohol content. Many people followed this rule and as a result the grape juice production during the prohibition era quadrupled.

Since the alcoholic beverage production totally paused due to ban, the supporters anticipated a significant drop in criminal activities. Yet, quite contrarily, an entirely new spree of crimes started to haunt the streets of the USA due to prohibition and prevalence of illicit liquor such as moonshine, bathtub gin and smuggling such as bootlegging, rum-running and speakeasy clubs etc. The working class that were not in a financial position to afford to get around the law often ended up brewing illegally by themselves or showing up at ‘speakeasy clubs’ which were illicit establishments where alcoholic beverages was sold during the prohibition era. These clubs were mostly operated by the mafia. During the pre-prohibition era the mafia was only limited to prostitution and gambling. After understanding the exponential growth of demand for alcohol and its value in the black market, the mafia initiated ‘bootlegging’ (smuggling over land) and ‘rum-running’ (smuggling over sea). Initially, rum-runners smuggled cheap Caribbean Rum to Florida speakeasy clubs. The low price of liquor soon convinced them to smuggling even expensive alcohols such as Canadian Whiskey, French Champagne, and English Gin into major cities such as Boston, New York, and Chicago.

The government established the Bureau of Alcohol Prohibition in order to deal with the new waves of criminal activity. Just in the first six months of 1920 the federal government opened around 7,000 cases against the violation of the Act. By the end of 1921 fiscal year, the figure quadrupled and the figure continued to rise dramatically over the next 13 years. The complexity of the smuggling grid rose higher in response to each raid. In order to prevent ‘bootleggers’ from producing alcohol from industrial use ethanol, the federal government ordered the industrial alcohols to be poisoned. In response, within a very short period of time the ‘bootleggers’ hired chemists to detox the alcohols. The Treasury Department then ordered the industrial alcohols to be poisoned with methanol, a move which endangered lives of the people and ultimately killing at least 10,000 people before the prohibition was rescinded. 

The prohibition fueled criminal activities to rise to never foreseen levels. Frequent outbursts of gunfire between gangs and the police and sometimes between gang rivals caused massive damage to the nation. Chicago was the most affected area from criminal activity. Gang leaders such as Al Capone, who was the leader of organized crime in Chicago, took the ‘bootlegging’ business to the most violent extents. After one year since prohibition, a study of more than 30 major U.S states revealed that the total crime rate had increased by 24%, theft and burglaries by 9%, homicides by 12.7%, assaults and battery by 13%, drug addiction by 44.6%, and cost to the Police Department by 11.4%. Even though the failure of the Prohibition Act was learned by as early as 1925, the ban was lifted only in late 1933 to control illicit liquor after experiencing a loss of millions of dollars in tax income and thousands of lives. The National Prohibition Act marked itself in the history as one of the most controversial acts ever passed in the United States.

The interesting chemistry between alcohol and the brain is that it is almost impossible for humans (and animals too) to walk out from alcohol once experienced. The relationship between human and alcohol dates back to the prehistoric ages. While Sri Lanka is not an exception the drinking community of Sri Lanka is different in alcohol preference. A study carried out by WHO in 2010 (published in 2014) revealed that the most consumed type of alcohol by Sri Lankan drinking community is distilled spirits. Out of alcohols consumed in Sri Lanka, the share of distilled alcohol is 85.2%. This has gained Sri Lanka the 8th position in the world for drinking hard liquor. What is good about Sri Lanka is that its alcohol consumption level is not dangerous. The country is ranked at 130th based on the consumption volume i.e. 3.7 liters per capita per year of which 2.2 and 1.5 liters are official and illicit respectively. The YLL score of WHO (Years of Life Lost) which describes the rate of loss of years of life attributable to alcohol consumption for Sri Lanka is 4 out of 5 which is alarmingly high. These figures reveal that Sri Lanka’s alcohol consumption volume is much less compared to many nations but its preference for hard liquor is at dangerous level (refer to Table 1&2). The issue, therefore, in Sri Lanka is to change the drinking preference. The budget proposal on liquor tax has attempted to address this issue. Therefore, learning a good lesson from USA also, this tax revision should be understood as an attempt to rescue consumers of high alcoholic drinks and to introduce a gradual shift to low-alcoholic drinks which would help wipe out the illicit brew Kasippu and improve the YLL state of Sri Lanka.

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Latest comments

  • 1
    0

    No one drinks wine in impoverished North Korea (except maybe the political leadership). Sri Lanka comes right behind North Korea with only 0.1% of wine being consumed, out of the total volume of alcoholic beverages sold here. This is because the excise duty and taxes on wine are so absurdly, prohibitively and unconscionably high here. This is very unfortunate, because the people who are most deprived by this measure are the ladies, who occasionally like to sip some wine now and then.

    Actually, this is a clear case of thoughtless (but not deliberate) discrimination against women! Most women don’t like beer and don’t relish hard liquor either so they are forced to abstain from drinking at all. As the new Excise Commissioner is a woman, she should use her influence to rectify this situation. Our patriarchal society thinks that drinking is solely a man’s privilege and prerogative and that women should have nothing to do with alcohol.

  • 0
    0

    what the table fails to highlight is consumption by region and month.
    In Sri Lanka the highest consumption I think probably will be in Colombo….and the time of the year …Big Match seasons ?

    • 2
      0

      It is certainly not true that “it is not possible to wak away from alcohol once experienced”. There are many people who drink a glass and stop right there. It becomes addictive only if you let it. That often happens to the weak-minded. But the same weak-minded category are the patronizers of astrologers , miracle-working sadhus and Sakvithi Ranasinghe types. But nobody is trying to ban astrologers.
      “Temperance” is tied up intimately with our politics from colonial days.. But in this 21st century, there is no point promoting “moral values” which are impractical. If someone wants to get rid of the so-called Kasippu menace, they should call for legalization of Kasippu. Some varieties of Kasippu are in fact of better quality than certain brands of Arrack. If it is legalized, quality could be controlled.

  • 1
    2

    I think Sri Lanka should make it Haram to drink any type of alchol .our people do not drink good one but cheap one.
    How many families suffer due to this menace. How many die due to drink and drive.
    How many people addicted to this and sell jewesry and household items to buy drinks .
    How do not realise this and ban it all for good .

  • 0
    0

    what is unrecorded consumption? …and how is the figure arrived at if it’s unrecorded.
    I think that unrecorded consumption of Kassipu and red spirit is very high

  • 1
    1

    Singhalese pundit

    You should start a “Sura Virodhi Vyaparaya” (temperance movement) rather than declaring the stuff being Haram.

    Banning legal liquor will increase the production and sale of moonshine (Kasippu, Heli Arrakku, Kashiya, Katuhambi, Suduwa, hooch) illegally which could result in un-taxed income, health hazard, money laundering, ……… increase in other related criminal activities.

  • 1
    0

    Government does not care about health of people.it only care about taxes .
    As long you get money it does not matter for you alchol or drugs are sold.why money and taxes are coming into government .
    This drink habit has spoiled millions of families still we do it learn?
    Why ?
    Look how many accident?
    How many death ?
    How many family break down ?
    How many disease?
    How many murders?
    How many quarrel?
    How many disputes?
    How many divorce?
    How and how and yet man never learn a lesson?
    Why?.
    Addiction to drink ?
    You can not give up ?
    Good luck for You?
    You will only learn when drink and drive causes a death to your family or friends ?
    Or some one die from.drink
    Humanity never learn?
    What goodness this drink has brought to the country except taxes.
    What goodness it has brought except a few buniess for some people.?
    Compare good and harm ?
    Which prevails.?
    I do not tell you do not drink but do not spoil next generations.
    This is the result of western culture .
    Where is Buddhist teaching?
    Where are monks on this issue?

  • 0
    0

    We elected a govt to collect all monies possible through legal means and to save the average citizen from excessive taxation.What our govts had done since 1977 is to kill the goose that lays the golden egg ( taxes on liquor). At one time, I think it was when dr.N.M.Perera was the FM, the Excise Dept / Distilleries Corporation became the main source of money for the treasury.

    I am not advocating drunkeness. I am also not biased against Liquor, I have been working in the industry through nearly 30+ years.

    I feel that the Govt should forget about temperance ( then what standing has S got in the society?) and govern the country. Let the monks do their best to wean people away from liquor, it is their duty and not that of the politician.Some politicians support faust temperance – because have a foot in the industry.

  • 1
    0

    Dear Tharosha,
    Looks like you are Trinitian by observing the tie in the picture.
    But I suggest to you to get more life experience before commenting on matters related to alcohol.
    See u in 15 years, Respice Finem

  • 3
    0

    Excellent article with great data and analysis that is relevant to the lawmakers. Hope Mangala will translate this article into simple Sinhalese and send it to Pres Srisena along with a tutor.

  • 0
    0

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 0
    2

    So, you consider Sr lanka s similar to the america in 1920s ?. What a way for a young mind to think about his own country. america is a country made up of immigrants who did not have a proper culture. So, this is what you learned in Sri lanka. ARE YOU FROM AN INTERNATIONAL SCHOOL ?

    • 1
      0

      Dumb Jimmy,
      Are you also not an immigrant to America?
      Is it because of our superior culture that you decided to live in America?

    • 0
      0

      Jimmy,

      We may not agree with this boy’s views. But we have to encourage youngsters like this to write and express their valued opinion.

      • 2
        0

        Instead of focusing on the messenger, focus on the message if you have the capacity. Calling him a “boy”, do you think you are better than him or do you have better capacity than the author Mr. Rajaratne?

        • 0
          0

          Boys don’t consume liquor, Men do
          Those who haven’t consumed liquor has less capacity to understand the pros and cons of alcohol consumption

  • 0
    0

    Tharosa Missaka Rajaratne believes lowering beer tax will lure away kassipu consumers. It will not. Kasippu is a hard drink and it has methanol. Kassipu drinkers will not get the same kick from arrack. In any case they never live long enough to try.
    Colombo elites may benefit from cheaper beer but it is still unaffordable to the not so privileged. The winners of course is the beer lobby.
    The failure of prohibition in US was entirely due to corruption. Offshoots of this phenomenon is the mafia and other ills.
    There was a time when dailies carried news of kassipu arrests. Now almost nil. Why? The bribe level has stabilized!

  • 0
    0

    While it is good to encourage young writers, there must be a limit to simplistic ideas being bandied around. To suggest that kassippu drinkers will switch to beer if the price of beer is reduced is not only fanciful but absurd. The difference in price between a bottle beer and say even half a bottle of kassippu is monumental. If the price of arrack was brought down to a level somewhat comparable to kassippu, then there is some semblance of reality there. The writer is best advised to discuss his ideas with his peers or others before rushing in to publish. He will then have an opportunity to develop his thoughts.

  • 0
    0

    Dear Tharosha,
    In addition to my previous comment, I suggest you to live and let live – This can be very beneficial in your future relationships. This is assuming you are a Trinitian because Trinity is a very liberal institution. How is the rugby team shaping up?

    Also, we are spending a great deal of resources for paddy cultivation. We waste water and cut trees to grow paddy which is then thrown out as Sri Lankans increasingly prefer basmati – which is from Pakistan.
    So this rice can be used as a ingredient for beer production. If we encourage soft liquor then we may even have a good industry capable of exporting. This can also resolve many issues facing our rural ecoonomy as rice farmers would get a better deal

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