International Journal of Research in Management & ISSN : 2348-6503 (Online) Vol. 2 Issue 3 July - Sept. 2015 ISSN : 2348-893X (Print) Business Studies (IJRMBS 2015) State Marketing Corporation Limited (TASMAC) – An Overview Dr.S.Sivasankaran Associate Professor in Commerce, S.T.Hindu College, Nagercoil, Tamilnadu,

Abstract The Tamil Nadu State Marketing Corporation Limited (TASMAC) is a company incorporated under the Companies Act, 1956 on 23.05.1983 with Registered Office at . TASMAC is vested with the exclusive privilege of wholesale supply of IMFL for the whole State of Tamil Nadu as per Section 17 (C) (1-A) (a) of the Tamil Nadu Prohibition Act, 1937 (Tamil Nadu Act X of 1937). It has taken over the wholesale distribution of Indian Made Foreign Liquor from the Private Sector in the whole of Tamil Nadu during May 1983. The present study analyses the TASMAC in various aspects.

Keywords TASMAC, Employees, Sales, History, Directors, Origin

I. Introduction of C. Rajagopalachari. Between 1937 and 2001, it was lifted briefly The Tamilnadu State Marketing Corporation Limited (TASMAC) during 1971-74, 1981–87 and 1990-91. After 1983, TASMAC is a company incorporated under the Companies Act 1956 on 23- was in charge of wholesale liquor sales in the state whenever 05-1983with Registered Office at Chennai. TASMAC is vested prohibition was lifted. In 2001, prohibition was lifted again with the exclusive privilege of wholesale supply of IMFL for the and TASMAC became the wholesale monopoly for alcohol. whole State of Tamilnadu as per Section 17 (c) (1-A) (a) of the For retail vending, the state auctioned off licenses for running TamilnaduProhinition Act, 1937 (Tamilnadu Act X of 1937). It liquor shops and bars. But this led to the formation of cartels has taken over the wholesale distribution of Indian Made Foreign and loss of revenue to the state. The government tried to counter Liquor from the Private Sector in the whole of Tamilnadu during this by introducing a lot system from the financial year 2001-02, May 1983. In order to completely eliminate the sale of contraband, where potential bidders bid for shops grouped by revenue. But spurious and non-duty paid liquor in some licensed premises under the lot system could not prevent cartelization, as bidders later the system of retail vending by private persons, which can affect withdrew in favour of others. In October 2003, the government the public health of the liquor consuming public and wide spread passed an amendment to the Tamil Nadu Prohibition Act, 1937, violations of Maximum Retail Price (MRP) of liquor fixed by making TASMAC the sole retail vendor of alcohol in the state. the Government, both of which also cause loss of revenue to the By 2004 all private outlets selling alcohol were either shut down Government and in order to curb the organized groups and cartels, or taken over by the company. This monopoly established by who act in groups to ensure that application are not made for a the AIADMK government of J. Jayalalitha came into effect on substantially large number of shops so as to keep them vacant and 29 November 2003. A very bold imitative in commercial lines. thereby to corner the retail vending trade causing loss of revenue The DMK government of M. Karunanidhi which took power the Government. It was considered necessary by Government to in 2006, did not revise its predecessor’s policy and TASMAC grant the exclusive privilege of retail vending of Indian Made continues to control the alcohol industry in the state. Again from Foreign Sprites to the State owned public sector under taking, 2011 AIADMK returned to power also maintaining status quo, TASMAC. Accordingly, the exclusive privilege of Retail Vending introduced elite bars to elite customers as addion. of IMFS was granted to TASMAC under SEC.17(C)(1-B) of the Tamilnadu Prohibition Act 1937, TASMAC is doing the retail IV. Organization business also successfully with effect from 29-11-2003. TASMAC TASMAC is wholly owned by the , has had a steady growth in its sales turnover over the year’s starting coming under the purview of the Ministry of Prohibition and at Rs.139.41 crores in 1983-84. It has increased to earn a profit of Excise. Its headquarters is situated at the CMDA towers in , Rs.7335 crores in 2005-06 and in the current fiscal it is estimated Chennai. It is governed by a board whose members belongs to the to touch Rs.16000 crores, with 33000 effective labourers, staff, Indian Administrative Service (IAS). The company organisation supervisors and employees. is divided territorially into five regions- Chennai, , , Trichy and Salem each under a regional manager. II. Objectives of The Study These regions are further divided into 33 districts run by district The following are the important objectives of the present study. managers. As of 2010, the company has around 30,000 employees • To study the history and organization of TASMAC in and operates about 6800 retail liquor outlets throughout the state. Tamilnadu. Employees of TASMAC are not considered as government • To analyses the annual revenue of TASMAC. employees and are not entitled to the benefits and legal rights • To analyses the capital structure and impact of TASMAC. (like statutory pay, paid holidays and an 8 hour workday) of other employees of the state. The retail outlets do not have individual III. History names. Instead they are named as “TASMAC Shop XXX”, where TASMAC was established in 1983 by then Chief MinisterM. XXX stands for the outlet number. They are popularly referred to G. Ramachandran (MGR) for wholesale vending of alcohol in as “ shops”, though they sell other kinds of liquor as well. Tamil Nadu. The state has a long history of prohibition, first About half the outlets have bars attached to them. implemented in 1937 by the government www.ijrmbs.com 29 © All Rights Reserved, IJRMBS 2014 International Journal of Research in Management & ISSN : 2348-6503 (Online) Business Studies (IJRMBS 2015) Vol. 2 Issue 3 July - Sept. 2015 ISSN : 2348-893X (Print)

V. Growth complaints about disturbances created by drunk patrons from The following table shows the growth of TASMAC from 2002- residents in areas where the retail outlets are situated. High retail 03 to 2013-14. prices (due to a higher tax rate) and absence of a wide range of choices have led to a thriving alcohol tourism industry in the Table 1 : Annual Revenue of TASMAC neighboring union territory of Puducherry, where alcohol prices Annual Revenue of TASMAC are lower and different brands are available. TASMAC has been forced to offer more choices of brands to counter the increase in Fiscal Year Revenue in Crores % Change smuggling of non-available alcohol brands into the state. 2002 - 03 2,828.09 ----- 2003 - 04 3,639 28.67% VII. Formation of Retail Vending Division 2004 - 05 4,872 33.88% In order to completely eliminate the sale of contraband, spurious and non- duty paid liquor in some licensed premises under the 2005 - 06 6,086.95 24.94% system of retail vending by private persons, which can affect the 2006 - 07 7,300 19.93% public health of the liquor consuming public and wide spread 2007 - 08 8,822 20.85% violations of Maximum Retail Price (MRP) of liquor fixed by 2008 - 09 10,601.5 20.17% the Government, both of which also cause loss of revenue to the Government and in order to curb the organized groups and cartels, 2009 - 10 12,491 17.82% who act in groups to ensure that applications are not made for 2010 - 11 14,965.42 19.80% a substantially large number of shops so as to keep them vacant 2011 - 12 18,081.16 20.82% and thereby to corner the retail vending trade causing loss of 2012 - 13 21,680.67 19.91% revenue to the Government, it was considered necessary by the Government to grant the exclusive privilege of retail vending of 2013–14 23,401 7.93% Indian Made Foreign Spirits to the State owned public sector under Source: www.tasmac.gov.in taking, TASMAC. Accordingly, the exclusive privilege of Retail Vending of IMFS was granted to TASMAC under Sec.17 (C) Since the takeover by the government, TASMAC has seen an (1-B) of the Tamil Nadu Prohibition Act, 1937. TASMAC is doing annual revenue of growth of around 20 percent every year. The the retail business also successfully with effect from 29.11.2003. turnover in 1983 (the year of incorporation) was 183 Crore Rupees. In 2002-03 before the takeover of retail vending, the turnover CAPITAL STRUCTURE was 3499.75 Crore Rupees, out of which the government got The following is the capital structure of TASMAC a tax revenue of 2,828.09 Crore Rupees. After the takeover of (i) Authorized capital : Rs. 15.00 Crores retail vending, the tax revenue shot up to 3,639 Crore Rupees in (ii) Paid-up capital : Rs. 15.00 Crores the financial year 2003-04. The tax revenue has two components (100% contributed by Tamil Nadu State Government ) - excise tax and sales tax each constituting roughly 50% of the total. A large part of the tax revenue is accounted as profit for BOARD OF DIRECTORS OF TASMAC the state since it is both the wholesale and retail vendor and the The following Table shows the board of directors of TASMAC difference in the prices goes directly to the state exchequer. In the following four financial years revenue increased to 4872, 6087, Table 2 : Board of Directors of TASMAC (31.12.2014) 7300 and 8822 Crore Rupees respectively. In 2005-06, the 23 Sl. Board Of Directors Of TASMAC year old record for alcohol sales revenue in the state was broken. No. The 10,000 Crore (100 Billion) Rupees mark was reached in the 1 THIRU NATHAM CHAIRMAN financial year 2008-09, when the revenue was 10,601.5 Crore R.VISWANATHAN., Rupees. For the financial years 2009-10 and 2010-11 it stood at HON’BLE MINISTER 12,491 and 14,965 Crores respectively. Besides the tax revenue, (ELECTRICITY,PROHIBITION AND the company also makes money by selling annual licenses to run EXCISE) bars in its retail outlets. The steady growth in revenue is accounted CHAIRMAN OF TASMAC LTD., for by the periodical increase in retail prices and by increasing SECRETARIAT, CHENNAI- 600 009 alcohol consumption in the state. Hard liquors like whiskey, rum, wine, brandy and vodka account for about 80 percent of the sales 2 THIRU K.SHANMUGAM, I.A.S., DIRECTOR and beer accounts for the remaining 20 percent. PRINCIPAL SECRETARY TO GOVT., FINANCE DEPARTMENT, VI. Impact SECRETARIAT, The reorganization of retail alcohol trade in the state has brought CHENNAI-600 009 record revenues for the government allowing it to increase 3 Thiru APURVA VARMA, I.A.S., DIRECTOR spending on welfare schemes. Tamil Nadu ranks first among the PRINCIPAL SECRETARY TO states of India in alcohol sales by volume. While consumption GOVERMENT, HOME of alcohol has increased among the population, deaths due to PROHIBITION AND EXCISE consumption of contaminated illicit liquor (common during the DEPARTMENT, SECRETARIAT, prohibition era) have gone down. The monopoly trade has led to CHENNAI-600 009 widespread irregularities like adulteration, corruption, overpricing and black marketing in the retail outlets. It has also led to increased

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4 THIRU S.K.PRABAKAR, I.A.S., DIRECTOR Source:www.tasmac.gov.in PRINCIPAL SECRETARY TO It is clear from the Table 2 shows that Board of directors GOVERNMENT, of TASMAC. COMMERCIAL TAXES AND REGISTRATION DEPT EMPLOYEES SECRETARIAT, CHENNAI- 600 009 In the Wholesale Division, 350 regular employees of TASMAC 5 THIRU P.SEETHARAMAN, I.A.S., DIRECTOR and 300 employees from various Departments/Corporations (on COMMISSIONER OF PROHIBITION deputation) are working. Around 28,000 retail vending personnel AND EXCISE are working on consolidated pay in TASMAC. 23 District Managers CHEPAUK, CHENNAI- 600 005 with MBA qualification and 74 Assistant Managers (Accounts) are also working in TASMAC on contract basis. 6 THIRU T.SOUNDIAH I.A.S., MANAGING DIRECTOR, MANAGING TASMAC LTD., 4TH FLOOR, DIRECTOR CMDA TOWER- II, EGMORE, CHENNAI – 600 008

SALE OF TASMAC The following Table shows the sales details of TASMAC product

Table 3 : Sale of Top Ten Brands Name of the supplier Brand Name Sales Vol. % to total Balaji Distilleries Ltd. No.1 MC Dowell Medium Brandy 5428161 10.40 Shiva Distilleries Ltd. Monitor Ordinary Brandy 4746453 9.10 Mohan Breweries &Distl Ltd Old Monk xxx Ordinary Rum 9357631 7.59 Mohan Breweries &Distl Ltd Old Monk Deluxe Rum 2132379 4.09 Mac Agro Industries Ltd John Exshaw Medium Brandy 2002765 3.84 Midas Golden Dist. Pvt Ltd MC Dowell Amber Select Rum 1497736 2.87 Balaji Distilleries Ltd. No.1 MC Dowell Medium 1485702 2.85 Empee Distilleries Ltd. Old Secret XXX Rum 1456916 2.79 Shiva Distilleries Ltd Monitor Ordinary Whisky 1449752 2.78 Shiva Distilleries Ltd. Shivas XXX Ordinary Rum 1253230 2.40 Source: www.tasmacktn.com It is clear from Table 3.3 that, sale of top 10 brands, first place goes to MC Dowell, second place goes to Monitor Ordinary Brandy, third place goes to Old Monk and tenth place goes to Shivas XXX Ordinary Rum.

VIII. Conclusion Vol 2 (pp. 267 – 299). New York: Academic Press. The reorganization of retail alcohol trade in the state has brought [2]. Agho, A.O., Mueller, C.W. & Price, J.L. (1993). Determinants record revenues for the government allowing it to increase of employee job satisfaction: An empirical test of a causal spending on welfare schemes. Tamil Nadu ranks first among the model. Human Relations, 46(8), 1007 – 1027. states of India in alcohol sales by volume. While consumption [3]. Alderfer, C.P. (1969). An empirical test of a new theory of alcohol has increased among the population, deaths due to of human needs. Organizational Behavior and Human consumption of contaminated illicit liquor (common during the Performance, 4, 142 – 175. prohibition era) have gone down. The monopoly trade has led to [4]. Allaire, Y. &Firsirotu, M.E. (1984). Theories of organizational widespread irregularities like adulteration, corruption, overpricing culture. Organizational Studies, 5(3), 193 – 226. and black marketing in the retail outlets. It has also led to increased [5]. Allen, T.D., Herst, D.E.L., Bruck, C.S. & Sutton, M. (2000). complaints about disturbances created by drunk patrons from Consequences associated with work-to-family conflict: residents in areas where the retail outlets are situated. High retail A review and agenda for future research. Journal of prices (due to a higher tax rate) and absence of a wide range of Occupational Health Psychology, 5, 278 – 308. choices have led to a thriving alcohol tourism industry in the [6]. Bagraim, J.J. (2001). Organizational psychology and neighboring union territory of Puducherry, where alcohol prices workplace control: The instrumentality of corporate culture. are lower and different brands are available. TASMAC has been South African Journal of Psychology, 31(3), 43 - 49. forced to offer more choices of brands to counter the increase in [7]. Bard, M. & Moore, E. (2000). Mentoring and self-managed smuggling of non-available alcohol brands into the state. learning: Professional development for the market research industry. International Journal of Market Research, 42(3), References 255 – 265. [1]. Adams, J.S. (1965). Inequity in social exchange. In L. [8]. Baron, R.A. (1991). Motivation in work settings: Reflections Berkowitz (Ed.), Advances in experimental social psychology, on the core of organizational research. Motivation and www.ijrmbs.com 31 © All Rights Reserved, IJRMBS 2014 International Journal of Research in Management & ISSN : 2348-6503 (Online) Business Studies (IJRMBS 2015) Vol. 2 Issue 3 July - Sept. 2015 ISSN : 2348-893X (Print)

Emotion, 15, 1 – 8.

Websites • www.tasmac.gov.in. • www.kanyakumari.org.in • www.employeesstatstic.org.in • www.google.com

News Papers • • Daily Thanthi (Tamil)

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