Editorial
Booze, hooch and taxes
Writing his chairman’s review in the latest annual report of the Distilleries Company of Sri Lanka PLC (DCSL), the country’s biggest liquor manufacturer, Mr. Harry Jayawardena warned that pure coconut arrack may soon be history. This prediction was based on the price of this super-taxed product, which has made it totally unaffordable to the consumer. Obviously Jayawardena is talking from the perspective of the manufacturer, but nobody would or could dispute his logic. People don’t drink kasippu out of choice. The price stick, freely used by all governments, has driven imbibers into the arms of the illicit hooch mudalalis. Gone are the days when ‘Pol’ and ‘Gal’ arrack was priced at ten and eight rupees a bottle respectively. Today a bottle of ‘Gal’ costs Rs. 1,600, ‘Pol’ Rs. 1,750 and if you want it double distilled, a bottle would set you back a cool 2,000 bucks.
‘Pol’ of course refers to coconut arrack while ‘Gal’ stood for what was produced out of potable alcohol obtained as a byproduct of the Gal Oya sugar industry. The word “byproduct” was a clear misnomer; the sugar industry, whether at Gal Oya, Pelwatte or wherever, has long been making more money out of the alcohol distilled from the sugar cane molasses than from the sugar itself. This was probably why a previous government took over the listed Pelwatte Sugar Manufacturing Company established to help the country to be self-sufficient in sugar. While a private sector chairman of Pelwatte pre-takeover freely admitted that the company made more money from its alcohol byproduct that from its sugar, where the alcohol Pelwatte produces goes now is anybody’s guess. The budget debate would have been an opportunity to ask that question and get a very useful answer; but that did not happen.
We are writing this in the context of what emerged during the budget debate which ended on Thursday after 20 days of sound and fury with the predictably comfortable passage of Budget 2021. There was a lot discussion there about “artificial toddy,” something that Harry Jayawardena too has been talking about for many years. Matara District MP Buddhika Pathirana (SJB) estimated state coffers were being robbed of as much as Rs. 80 billion in excise revenue by artificial toddy manufacturers exploiting loopholes in the law. Pathirana says that the artificial toddy industry is rooted in the southern coastal area where a cocktail of urea, ammonia, nickel-cadmium from old cell phone batteries and sugar is used in a lethal brew.
He explained that the extent of the problem can be gauged with some simple arithmetic. Apparently only about one and a half liters or toddy can be had from a single coconut palm. Adding up the number of trees tapped and the volumes offered to distilleries, Pathirana estimates a discrepancy of 60-70,000 liters. Dangerously, it’s not only imbibers choosing to down rotgut with the attendant health implications, but also ordinary householders buying what they think is coconut vinegar who are at risk, he has pointed out. The Excise Department is well aware of the existence of this artificial toddy racket, which is a continuing one, although it does not agree that the Rs. 80 billion revenue loss that is alleged is accurate.
DCSL which took over the assets of its state-owned predecessor, the Distilleries Corporation during the Premadasa administration, when the government arrack monopoly (or near monopoly) was ended has long been conscious of the fact that it is a player in a so-called ‘sin industry.’ It has from the time of its first chairman, former Civil Servant V.P. (Totsy) Vittachi, been diversifying into various other businesses. Given that over 90% of what you pay for a bottle of arrack (or a single cigarette for that matter) are taxes the manufacturers are collecting for the government, and the payments to the state are not instantly made, a massive cash tranche is available to them to make other investments. This DCSL has cleverly done over the years, and its holding company, Melstar, is a highly diversified conglomerate into a variety of businesses. Ceylon Tobacco Company (CTC) has not done likewise to the extent of DCSL although it once diversified into insurance like its parent, British American Tobacco. However CTC pays its tax collection to the Treasury on a weekly basis. We do not know how it works where DCSL is concerned.
State Minister Nivard Cabraal who is the virtual Deputy Minister if Finance (the Prime Minister holds the finance portfolio) has called for a report from the Excise Department and the Secretary to the Treasury on matters that emerged in Parliament during the discussion. He acknowledged Pathirana’s useful contribution to the debate and assured follow-up on matters raised. The hard liquor industry has not only been a substantial source of government revenue, but had also produced many millionaires in this country. Arrack has made fortunes for different entrepreneurs from the Dutch and British colonial era when so-called arrack renting was a lucrative business. There has been generous philanthropy arising from such fortunes with, for example, the founding of Visakha Vidyalaya by Mrs. Jeramias Dias (Selestina Rodrigo) of Panadura. Ironically, Arthur V. Dias (popularly known as Kos Mama because of his campaign to plant jak trees), the son of Jeramias Dias, became a leader of the temperance movement at a later time.
It is common knowledge that the illicit liquor industry rampant in the country not only costs the government desperately needed revenue but also is at the root of corruption in the various enforcement agencies. Political patronage to this menace has been freely alleged over the years as have similar allegations with regard to narcotics. Prohibition has not proved a success wherever it was attempted. Government must necessarily balance competing interests including revenue, the cost of alcohol related disease to the healthcare system, the damage drunkenness causes innumerable families and many more in designing its alcohol policies. There’s a lot wrong with what prevails – artificial toddy is just one aspect.
Editorial
Time to pursue climate relief more vigorously
Wednesday 24th December, 2025
Climate change has upended long-held theories about cyclones in the equatorial regions, and Sri Lanka, which was once considered reasonably safe from such severe weather phenomena, is becoming increasingly vulnerable, as evident from the devastating impact of Cyclone Ditwah. All signs are that the worst is yet to come, and the need for a multi-pronged national strategy to prepare the country to face future natural disasters linked to climate change cannot be overstated.
The government of Sri Lanka has been in overdrive, seeking assistance from the international community for its post-Ditwah rebuilding programmes. The World Bank has estimated the losses caused by the recent disasters at USD 4.1 billion. Foreign assistance is coming, but in dribs and drabs. There have also been loans for rebuilding, but such borrowing is bound to make the country’s efforts to achieve debt sustainability even more uphill. This has caused much concern to international experts.
A group of internationally renowned economists, including Nobel Laureate Joseph Stiglitz, has called for the “immediate suspension of Sri Lanka’s external sovereign debt payments, and a new restructuring that restores debt sustainability under the new circumstances”. Other members of the group of eminent economists urging the international community to help Sri Lanka are Jayati Ghosh, Thomas Piketty, Martín Guzmán and Kate Raworth. They have said: “This environmental emergency is poised to absorb – and potentially exceed – the extremely limited fiscal space created by the current debt restructuring package. Additional external debt is already being obtained from the IMF, and more lending to deal with the impacts of the disaster is likely.” These economists deserve praise for their concern for a disaster-stricken nation mired in debt, but whether international creditors will take a sympathetic view of Sri Lanka’s predicament and agree to another round of debt restructuring is in doubt.
Another debt default is something Sri Lanka needs like a hole in the head. Hence the need to explore other avenues to raise finance for rebuilding.
Leader of the United Republic Front and former Cabinet Minister Patali Champika Ranawaka argued in an interview with Derana TV on Monday night that Sri Lanka should leverage its situation as a victim of climate change to gain access to international climate financing to cover at least part of the cost of post-disaster rebuilding, instead of depending on loans. He said that obtaining such climate relief should be part of Sri Lanka’s recovery strategy, and some debt relief should be sought from the carbon-polluting industrialised nations among its creditors.
There is a growing corpus of literature about the pathways vulnerable states can use to seek climate aid. The countries affected by climate change can gain access to international aid and relief through established climate finance mechanisms, humanitarian channels, and multilateral institutions. A dedicated Loss and Damage Fund is now in place to channel resources to vulnerable nations. There have been instances where some vulnerable nations, especially those of the organisations, such as the Small Island Developing States (SIDS), have successfully accessed international climate change finance, relief and legal avenues for support. Tuvalu became one of the first Pacific island nations to access climate finance from the Green Climate Fund. However, UN reports show that SIDS still receive only a fraction of international climate finance relative to their vulnerability. There’s the rub.
Another method the victim nations can adopt to raise funds is ‘innovate finance’, which has been defined as “creative use of financial markets and partnerships with international finance institutions to support adaptation and resilience in a climate-vulnerable nation”.
What Ranawaka has proposed by way of easing the country’s rebuilding burden to some extent deserves serious consideration. It is hoped that the government will take such views on board at this crucial juncture.
Editorial
A very sad day for the rule of law
Tuesday 23rd December, 2025
What’s this world coming to when the police cringe and cower before politicians? The JVP has a history of attacking the police. It even murdered the family members of the police personnel who dared defy its illegal orders during its reign of terror in the late 1980s. Old habits are said to die hard. A policeman attached to the Suriyakanda police station has complained that a gang led by a JVP/NPP MP assaulted him following a raid on a cannabis cultivation in Bulutota in the Suriyakanda area. The victim was first admitted to the Kolonna hospital and thereafter transferred to the District General Hospital, Embilipitiya.
NPP MP Shantha Pathmakumara Subasinghe has denied any involvement in the aforesaid assault incident. He has claimed that the policeman confronted him and there was a heated argument; the assault incident was a total fabrication and part of a conspiracy against him, he has alleged. If so, why was the policeman hospitalised and transferred to a District General Hospital? Another police officer has been transferred over the cannabis cultivation issue, according to media reports.
Worse, the policeman receiving treatment was arrested yesterday while his assailants were moving about freely! Thankfully, he was granted bail.
If the land used for cannabis cultivation in Bulutota had belonged to an Opposition politician, IGP Priyantha Weerasooriya himself would have rushed there and held a press conference. Most of all, if the assailants of the policeman had been political rivals of the ruling JVP/NPP, they would have been arrested immediately.
The JVP/NPP politicians have apparently graduated from roughing up their political rivals to assaulting policemen. Such transgressions brought about the collapse of the Mahinda Rajapaksa government, which gave free rein to the likes of Mervyn Silva, who together with his son, reduced the police to a bunch of lackeys. The culture of impunity persists despite last year’s regime change.
The JVP leaders asked for stern action against Mervyn, his son and other goons—and rightly so. They sought a popular mandate to govern the country, break what they called a 76-year curse, eliminate bribery and corruption and political violence and restore the rule of law. But today the ruling party politicians have risen above the law. The police mysteriously ran out of breathalyzers when NPP MP Asoka Ranwala met with an accident. He was subjected to a blood alcohol test more than 12 hours after the crash, and his blood and urine samples were sent to the Government Analyst’s Department. It was a foregone conclusion that those samples would test negative for alcohol. There have been instances where heroin samples sent to the Government Analyst’s Department for testing turned out to be flour! Such is the integrity of that institution.
The police unashamedly sided with a group of JVP cadres who stormed a Frontline Socialist Party office and forcibly occupied it a few months ago. The JVP/NPP members can park their vehicles anywhere on the expressway with impunity. Drunk driving is not a problem for the government MPs, for they can undergo blood alcohol tests leisurely after they become fully sober in case of accidents. When raids happen to expose ruling party politicians’ involvement in drug dealing, police officers who conduct them are transferred or assaulted.
One of the worst things that can happen to a country is for its citizens to lose faith in its legal system. A perquisite for bringing order out of chaos in any society is to restore the rule of law, and this is a task for statespersons and not a bunch of self-righteous politicians posing as messiahs.
Politicians take leave of their senses when power goes to their heads. This may explain why they rough up policemen, subvert the legal process, hold ceremonies to mark the resumption of train services after disasters and dance like clowns at railway stations while the country is mourning hundreds of its citizens who perished in disasters.
Editorial
Danger of weak drug regulation
Monday 22nd December, 2025
Maan Pharmaceuticals Ltd., the manufacturer of Ondansetron, which has been withdrawn from hospitals here pending a probe, is reported to have asked the Sri Lankan health authorities to have the drug tested by an internationally accredited laboratory. The use of nine other Maan products too has been suspended in Sri Lanka over quality concerns. Maan’s reaction has come as no surprise; all companies ardently defend their products. However, its concerns should be heeded. The National Medicines Regulatory Authority (NMRA) and the Ministry of Health ought to furnish irrefutable evidence in support of their decision to suspend the use of the drugs at issue. The manner in which the NMRA has carried out its duties and functions, especially granting approval for drugs and investigating complaints of their quality, over the years, does not inspire public trust.
The subtext of what has been reported of the Maan’s letter to the Sri Lankan health authorities is worth taking note of. It can be argued that in corporate newspeak, Maan has questioned the competence of the NMRA to test its products. As Maan would have us believe that its products meet international standards, it should be asked to state whether it has gained access to stringent regulatory destinations, such as the US and EU, and, if not, why.
It is being argued in some quarters that the degradation of pharmaceuticals can happen due to improper storage and transport. Maan’s aforesaid letter reportedly has reference to drug storage here. There are allegations that the Sri Lankan health authorities leave imported drugs in freight containers under inappropriate conditions for extended periods. However, the phials of Ondansetron which were tested at the Kandy National Hospital and found to be affected by microbial contamination had been stored properly and their seals were intact, according to media reports, quoting doctors. Thus, the contamination of the drug points to issues in manufacturing and packaging rather than storage and transport.
Meanwhile, a news item in this newspaper today reveals the pivotal importance the pharmaceutical industry has assumed in the Indian economy; India’s pharmaceutical exports have crossed USD 30 billion. Therefore, some critics of the Indian pharmaceutical products are of the view that India will do everything in its power to protect the interests of its drug companies, including Maan. But the fact remains that India itself has cracked down on some of its pharmaceutical companies involved in scandals. It severely dealt with the Indian companies that manufactured contaminated cough syrups which killed 66 children in Gambia in 2022 and 22 children in India in September 2025.
In the greed-driven corporate world, profits take precedence over human life, and there is hardly anything that Big Pharma spares in pursuing profit maximisation. As we pointed out in a previous comment, the World Health Organization has revealed that at least one in 10 medical products in low-and middle-income countries fails to meet quality standards or is falsified. This shows the enormity of the problem of fake and substandard drugs. Hence the need for robust mechanisms to protect patients.
All issues related to substandard and falsified drugs and their adverse effects in this country boil down to the failure of successive governments to address multiple problems pertaining to drug regulation and testing and find long-term solutions. Flaws in regulatory oversight and the absence of proper testing facilities have helped corrupt politicians and bureaucrats enrich themselves by turning this country into a dumping ground for poor-quality and fake medicines. Health Minister Dr. Nalinda Jayatissa himself has said that not all drugs approved by the NMRA undergo rigorous testing, and thorough tests are conducted on drugs only when there are complaints about their quality.
Most of all, the NMRA has to be cleansed, as a national priority. Its history is replete with numerous scandals, including allegations of corrupt drug registrations, data manipulation, issues with substandard and fake medicines leading to patient deaths prompting investigations, suspensions, legal action, and internal turmoil with officials resigning amidst claims of threats and cover-ups.
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