A group of liquor retailers on Wednesday met Chief Minister N. Kiran Kumar Reddy and told him that they have been selling liquor above the maximum retail price and the majority of the revenue earned was spent on “pay-offs” to a section of ruling party leaders including ministers, legislators, Opposition leaders, police, excise and media personnel.

The divulgence by the representatives of the AP Wine Dealers Association has put the government on a sticky wicket, especially embarrassing at a time when excise minister Mopidevi Venkataramana is trying to dismiss allegations of bribery leveled against him by a syndicate owner in Khammam.

The disclosure came when a delegation of the association met the CM at his camp office. While Mr Kiran Kumar Reddy dubbed the ongoing controversy over the liquor syndicates as “self-made”, by the retailers themselves, the association blamed it on the State’s revenue-driven excise policy, it is learnt.

According to sources, the Association’s representatives told the Chief Minister that they are forced to sell above MRP to recover the high licence fees paid in auction. “The pay-offs are required to let us continue to sell at higher price,” they reportedly said. They urged Mr Kiran Kumar Reddy to revert to the fixed licence fee system. They also told the CM that the retail margin, which was 30 per cent when licence fee was Rs15 lakh, was reduced to 20-25 per cent even as the fee rose to the region of Rs1 crore to Rs 2 crore.