Tamil Nadu State Marketing Corporation Limited (TASMAC)
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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) Tamil Nadu State Marketing Corporation Limited (TASMAC) – An Overview Dr.S.Sivasankaran Associate Professor in Commerce, S.T.Hindu College, Nagercoil, Tamilnadu, India 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 Chennai. 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 government of Tamil Nadu, 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 Egmore, 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, Coimbatore, Madurai, 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 “wine 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 Indian National Congress 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.