Tamil Nadu Chief Minister Joseph Vijay has reportedly initiated sweeping reforms in the state’s liquor retail sector, directing officials to eliminate alleged corruption and revenue leakages within the Tamil Nadu State Marketing Corporation (TASMAC). The issue was among the key topics discussed during the first Cabinet meeting chaired by the Chief Minister after assuming office.
According to officials, Vijay instructed the administration to ensure that all revenue generated through liquor sales is directly credited to the state treasury without any diversion. Senior bureaucrats reportedly informed the Chief Minister that unofficial collections amounting to nearly ₹102 crore per month had allegedly been taking place within the TASMAC network under the previous administration.
Officials estimate that approximately ₹1,600 crore may have been diverted over the past five years through unauthorized collections across TASMAC’s wholesale and retail operations. The Chief Minister has reportedly ordered the immediate dismantling of any such practices and directed departments to strengthen monitoring mechanisms.
Alleged Collection Network Under Scrutiny
Internal reports submitted to the government indicate that unofficial levies were allegedly collected at various stages of the supply chain. These reportedly included ₹90 per liquor case, ₹40 per beer case and ₹20 per wine case through warehouses, transport channels and retail outlets.
With an estimated 8.8 million consumers purchasing liquor through TASMAC every month, officials believe the alleged system generated substantial off-the-books revenue over several years.
Speaking on the issue, the state’s Excise Minister said the government has no interest in revenues generated through corrupt practices and has been instructed by the Chief Minister to plug all leakages and ensure public funds are protected.
Government Eyes Bottle Return Reforms
The government has also identified alleged irregularities in the empty bottle return mechanism, which officials estimate may have contributed to corruption worth nearly ₹300 crore every month.
To address the issue, the administration is examining proposals to either incorporate the ₹10 bottle deposit into the Maximum Retail Price (MRP) or introduce a fully digital refund system. The government has also decided to transfer bottle collection operations to third-party agencies by the end of June.
Background of ED Probe
The latest developments come amid ongoing scrutiny of TASMAC’s operations. In March 2025, the Enforcement Directorate conducted searches at TASMAC headquarters and multiple other locations following allegations of financial irregularities.
The previous Tamil Nadu government challenged the raids before the Madras High Court, which dismissed the petition. In its observations, the High Court described money laundering as a serious offence affecting the public interest. The matter was subsequently taken to the Supreme Court.
717 Retail Outlets Closed
In one of its first major policy decisions, the Vijay-led government ordered the closure of 717 TASMAC retail outlets that were allegedly operating in violation of regulatory norms.
The Excise Department estimates that the move could result in an annual revenue loss of nearly ₹8,000 crore. However, the government has clarified that it has no plans to compensate for the shortfall by increasing liquor prices, emphasizing that transparency and accountability will remain its priorities in the management of TASMAC operations.