In a surprise move, the Distilleries Company of Sri Lanka (DCSL) last week slashed prices of three of its products, including Extra Special Arrack, better known as "Gal", hardly a month after rates were pushed up by as much as Rs. 22/50 per bottle.

Industry officials described DCSL’s price reduction—Rs. 16 on a bottle of White Label Arrack, Rs. 13 on Extra Special (Gal) and Rs. 9 on Special Arrack—as a "marketing strategy" as the recent increase of VAT on alcohol from 15% to 17% and BTT from 1% to 5% didn’t permit a dip in prices

"With taxes enhanced, all liquor manufacturers had no option, but to revise prices," they pointed out.

DCSL’s Chief Executive Officer Maxie Peries declined to comment on the unexpected downward revision of prices. "Contact my chairman," he suggested. But chairman Harry Jayawardena was not accessible.

Expressing surprise that DCSL had slashed prices, Mrs. W. M. Mendis, Executive Director, W. M. Mendis and Company, said liquor manufacturers were forced to increase rates following the revision of taxes. "Even we increased our prices."

Industry players believe that DCSL is adopting a market strategy by pushing up prices by Rs. 22/50 early this month and unexpectedly announcing a reduction three weeks later as it hurts business with more and more people moving towards illicit liquor.