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Editorial

Booze, hooch and taxes

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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.



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Editorial

Misplaced priorities

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Sri Lanka has a very ‘promising’ government and a perennially protesting Opposition. The government makes various promises, which are like piecrusts made to be broken. The Opposition in a perpetual state of agitation bursts into protests at the drop of a hat. The two sides have been clashing in Parliament instead of sinking their political differences and cooperating at least in the aftermath of a disaster.

The Opposition has requested Speaker Dr. Jagath Wickramaratne to appoint a Parliamentary Select Committee (PSC) to probe the government’s alleged failure to mitigate the impact of Cyclone Ditwah despite repeated warnings issued by the Meteorology Department and the Irrigation Department. The government is determined to avoid a fate similar to that which befell the Yahapalana government following the Easter Sunday terror attacks, which became the undoing of that dysfunctional regime. It is therefore very unlikely to meet the Opposition’s demand at issue. Even if it agrees to appoint a PSC to probe its own alleged lapses, by any chance, it will not allow an Opposition MP to chair the committee and will go all out to frustrate its rivals’ efforts to ruin its political future.

Interestingly, some of the key Opposition members are former Yahapalana MPs who sought to derail a PSC probe into the 2015 Treasury bond scam. They craftily appointed a member of the JVP, which was a Yahapalana partner in all but name, as the Chairman of that PSC, and incorporated a slew of footnotes into the committee report in a bid to dilute it.

In this country, PSCs rarely help get to the bottom of the issues they probe. The PSC on the Treasury bond scam went out of its way to clear the then Prime Minister Ranil Wickremesinghe’s name, and helped the UNP scapegoat former Central Bank Governor Arjuna Mahendran and throw him to the wolves. In 2012, Mahinda Rajapaksa government turned a PSC probe into a witch-hunt against then Chief Justice Dr. Shirani Bandaranayake, who was subsequently wrongfully impeached. The PSC that investigated the Easter Terror attacks (2019) gathered a lot of valuable information but its findings, conclusions and recommendations were tainted by a glaring political bias.

Going by the government’s determined bid to let its MP Asoka Ranwala off the hook, following a road accident, how ruthless the JVP-led NPP will be in warding off threats to its political survival is not difficult to imagine. The Opposition can go on shouting until it is blue in the face but it will not be able to have the government’s alleged failure to heed disaster warnings and save lives investigated properly as long as the JVP/NPP is in power.

What we are witnessing on the political front, especially in Parliament, is like a drunken brawl at a funeral. The government and the Opposition are fighting while the country is mourning those who perished in recent floods and landslides.

What the political parties represented in Parliament ought to do at this juncture is to get their priorities right. They must stop clashing and make a concerted effort to carry out post-disaster rebuilding operations and strengthening the economy. They must not lose sight of the rapid depreciation of the rupee, and the disconcerting forecasts of an economic slowdown. The much-advertised revenue bubble, created by an unprecedented increase in vehicle imports, is about to burst, and the possibility of the country having a rupee crisis to contend with again cannot be ruled out. Foreign reserve targets are far from achieved, and there is a pressing need to boost the forex inflow and ensure that the country will be able to honour its pledge to resume foreign debt repayment in 2028.

All political parties have done precious little for the disaster victims. They have been only visiting the welfare centres and distributing relief materials collected from the considerate public. They ought to engage in post-disaster rebuilding actively. Reconstruction is a labour-intensive task. The self-righteous political leaders should mobilise their community level organisation for post-disaster rebuilding. Sadly, they have not even helped clean flood-hit houses.

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Editorial

Cops as whipping boys?

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Saturday 20th December, 2025

Disciplinary action has reportedly been taken against several police officers for their alleged failure to conduct a proper investigation into a recent accident caused by NPP MP Asoka Ranwala in Sapugaskanda. This move, we believe, has the trappings of a diversionary tactic. The police would have incurred the wrath of the government if they had conducted a breathalyzer test on Ranwala and produced him before a Judicial Medical Officer immediately after the crash where an infant, his mother and grandmother were injured.

Ranwala was subjected to a blood alcohol test more than 12 hours after the accident, according to media reports. The police would not have dragged their feet of their own volition. They were obviously made to do what they did. The law applies equally only to ordinary people. Will the police top brass explain why no disciplinary action was taken against the police officers who unashamedly sided with a group of JVP members involved in grabbing an office of the Frontline Socialist Party (FSP) in Yakkala in September 2025. After turning a blind eye to that blatant transgression, the police provided security to the JVP members who were forcibly occupying the FSP office. Thankfully, a judicial intervention made them leave the place. The current rulers claim they have not placed themselves above the law, unlike their predecessors. A wag says they have placed the law below them instead!

Having made a mockery of its much-advertised commitment to upholding the rule of law by intervening to prevent Ranwala from undergoing an alcohol test immediately after the aforesaid accident, the government is making attempts at face-saving. Curiously, blood samples obtained from Ranwala have been sent to the Government Analyst for testing! The government seems to have a very low opinion of the intelligence of the public, who voted for it overwhelmingly, expecting a ‘system change’.

It is being argued in some quarters that the disciplinary inquiry against the police officers has been scripted, and the charges against them will be dropped when the issue fizzles out. This argument is not without some merit, but there is a possibility of the government going to the extent of trying to clear its name at the expense of the police officers concerned if push comes to shove.

Successive governments have scapegoated police personnel and other state employees to safeguard their interests, and the incumbent administration is no exception; it has already sought to shift the blame for its failure to mitigate the impact of Cyclone Ditwah to the Meteorological Department, which, it has claimed, did not warn it about the extreme weather events fairly in advance. Opposition Leader Sajith Premadasa told Parliament on Thursday that the government had muzzled some senior officials of the Meteorological Department.

Some leaders of the incumbent government are bound to face legal action for their commissions and omissions when they lose power, and the state officials pandering to their whims and fancies will have to do likewise.

The public officials who are at the beck and call of politicians and carry out illegal orders should realise that they run the risk of being left without anyone to turn to in case they have to face legal action for their transgressions. Their ruthlessly self-seeking political masters will not scruple to sacrifice them.

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Editorial

Disaster relief mired in dirty politics

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Friday 19th December, 2025

Opposition Leader Sajith Premadasa has accused the government of interfering with the ongoing disaster relief programmes. Speaking in Parliament, on Thursday, he produced what he described as documentary proof to support his claim that disaster victims were required to have their applications for compensation endorsed by the heads of the Prajashakthi committees controlled by the JVP apparatchiks. Several other Opposition MPs have levelled the same allegation against the government in Parliament.

Two trade unions representing the Grama Niladharis have complained of political interference with their work, and even threatened to pull out of the disaster relief programmes unless they are allowed to carry out their duties and functions, free from political pressure.

Sri Lanka United Grama Niladhari Association (SLUGNA) President Nandana Ranasinghe told the media on 08 December that JVP/NPP politicians and their supporters were meddling with the disaster relief programmes at all levels and even obstructing the Grama Niladharis (GNs). He claimed that the political authority had sent letters to the District and Divisional Secretaries, directing them to appoint JVP/NPP members to the state-run welfare centres. SLUGNA Secretary Jagath Chandralal said state officials had been directed to obtain approval from the government members of the Prajashakthi committees for carrying out relief work. A few days later, addressing the media, Convenor of the Sri Lanka Grama Niladhari Association Sumith Kodikara also made a number of similar allegations. He said the NPP politicians were arbitrarily helping their supporters obtain Rs. 25,000 each as compensation. He stressed that only the disaster victims had to be paid compensation, and never had disaster relief programmes been politicised in that manner. These allegations are shocking enough to warrant probes, as we said in a previous comment.

Initially, the government denied the involvement of its Prajashakthi members in the process of selecting disaster relief beneficiaries, but now it allows them to work alongside state officials openly. This is an instance of the arrogance of power, which became the undoing of several previous governments, especially the ones led by the UNP and the SLPP. Minister K. D. Lal Kantha has gone on record as claiming that the Prajashakthi functionaries too should have a say in relief provision!

Funds the government is distributing among disaster victims belong to the state, and therefore no political party must be allowed to influence or control their disbursement. One can argue that it is prima facie unlawful for anyone other than authorised public officials to get involved in the process of distributing state funds as disaster relief. The Opposition should find out whether there is any legal provision for the involvement of the Prajashakthi functionaries in relief distribution or whether they are committing a transgression.

The government is apparently labouring under the mistaken belief that it can use disaster relief to shore up its approval rating as well as electoral prospects in view of the next election––the Provincial Council polls which it is coming under increasing pressure to hold next year. Political interference with disaster relief only exasperates the public beyond measure. A large number of disaster victims have held protests in several areas, claiming that they have been overlooked.

The JVP/NPP, which came to power promising to depoliticise the state institutions and revitalise the public service, should be ashamed of having stooped so low as to politicise the process of providing disaster relief. Politicians have a sense of shame only when they are out of power.

If the JVP/NPP leaders are wise, they will learn from the predicament of the Rajapaksas, who had to pay a heavy price for testing the patience of the public. The latter had to head for the hills with angry people in close pursuit. Now that the people have successfully got rid of a bunch of failed rulers, they may take to the streets again if their patience runs out. The government would do well to follow the established procedures in carrying out disaster relief programmes, without subjugating them to its political agenda and undermining their integrity.

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