By Sabyasachi Samajdar, FoodBizDaily.com Bureau Chief – New Delhi
September 16, 2009 – Although some of the Indian state governments allowed beer sales in the supermarkets but most of the states are still have a taboo to sale wine and beer in the supermarkets.
In view of this taboo among the governments, Indian wine industry has demanded to allow wine sale in the supermarkets as well as plead for reducing tax burden on wine.
According to Mr. Subhash Arora, President, Indian Wine Academy, beer has already been allowed to be sold in supermarkets in Delhi with a license of INR 50000 a year. It would make sense to make the availability of low alcohol products like beer and wine easy, especially when the neighboring Haryana has been doing successfully for almost 2 years. Not that Haryana has been a leader in announcing this policy. Punjab state capital Chandigarh has allowed it for more than 3 years. Goa, Maharashtra and Karnataka have followed it since.
During the last couple of years, it had become relatively easy to pick up wine from a few of the wine and liquor shops which were air-conditioned and stored only wine with a decent variety-Delhi State Industrial Development Corporation having taken the lead. But for women and many men it is not always conducive to walk into a liquor shop to pick up a casual bottle or two of wine. Internationally, women are known to be major buyers of wine and beer in the family and so it is a victory of sort for the women, Mr. Arora said.
The other important factor is the Commonwealth games 2010 which are already giving headache to the government of Delhi in terms of preparation delays. The tourism is related to the wine availability issue and the government is aware that in all alcohol consuming countries, picking up wine in a supermarket is like picking a pack of coke cans. This is one area it could handle easily without opposition this time.
The increase in the excise duty would still need to be brought down, at least to the original level of US$3 a bottle irrespective of the selling price, not because it irrational, or good for consumer or wine consumption should be increased or even because in the end, it would actually boost the excise duty collection drop that has taken place since the new excise was allowed this fiscal-but due to the latent pressure from the EU and indirectly from WTO. Earlier this month a delegation from EU was in Delhi and expressed their displeasure of the extraneous taxes beyond 150%. But before they arrived, Maharashtra had already brought the excise duties to a level where even the consumer was willing to accept, Mr. Arora added.
Mr. Arora also said that it is a matter of time that the government will realize the impact of increased duties resulting in lower collections, if not already under mounting pressure from the ministry of commerce to bring it down because of EU breathing on their neck. It will make sense to club the decrease in excise duty with the new retail policy.
Then only two major irritants will be left where EU cannot be help-only the sensibility will come in play. Delhi should allow opening of wine bars by reducing the license fee-it is already in existence in Maharashtra and Karnataka. The other factor would be to reduce the label registration charges. With the new wine retail policy in place, a 4-5 fold increase in labels can be expected if the registration charges are rationalized.
The producers will of course rejoice. So will the importers. Wine can be a good source of the top line as well as the bottom line-stores like Tesco and Marks and Spencer in UK are a prime example of this wine economy. Tesco, in fact rules the roost and is a trend setter in pricing, quality and value for money and has helped take the volumes of wine sale up significantly in UK, Mr. Arora mentioned.
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