State Govt. directed to issue licence to DSQ Beverages

By Our Special Correspondent

CHENNAI, APRIL 7. The uncertainty over the extra neutral alcohol (ENA) plant of DSQ Beverages is set to end with the Madras High Court directing the State Government to clear the decks for its operation by issuing requisite licence within six weeks.

Mr. Justice E. Padmanabhan, in his order dated March 30, had also asked the State Government not to ``grant licence or privilege or permission to increase the capacity of the existing units as ordered in G.O. 50 Ms. No. 50, Prohibition and Excise, dated February 11, 2000'' until DSQ Beverages is given the licence.

Company officials have indicated that DSQ Beverages would commence production of ENA once the licence is obtained following the court order.

The State Government, it may be recalled, had rejected the company's application for the manufacture of ENA, a basic feedstock for producing bottled alcoholic beverage, from grain. It had rejected the application on the ground that there was already excess supply of product.

Originally, the letter of intent (LoI) for the project was issued to the Tamil Nadu Industrial Development Corporation (Tidco) in 1991. Subsequently, the State Government had called for joint venture partner to put up the unit and signed an agreement with the DSQ group in 1993. In technology tie-up with JP International OY, Finland, the plant was set up with an investment of Rs. 80 crores. Production could not commence as the Government had rejected the application. What had surprised DSQ Beverages was the fact that the Government had chosen to allow existing bottlers to raise capacity after rejecting its own application.

The argument that the application was rejected as the policy did not encourage more units did not find favour with the Judge. ``Only at the final stage of rejection such a reason had been invented and set out in the order,'' he said.

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Section  : Business
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