I am not talking of the massacre at the Bombay Stock Exchange of the last two days. I am concerned with the aftermath of the massacre carried out by the Maharashtra Excise department with their punishing blow to the imported wine drinkers.

The massacre did not single out any caste, colour or creed. It was directed only to one class- of decent quality imported wine drinkers. It was the state government's dictum to switch to Indian or cheap imported wines, or better still drink Scotch whisky and keep the English tradition alive. If you can afford the luxury of drinking better quality wines, better lighten your wallets, seems to be the refrain.

The market is limping back to life, but like a bullet that barely missed piercing the heart, recovery is painfully slow and life may never be the same again. Says Sumedh Mandla, partner of FineWinesNMore, a Mumbai based importer, the market is slowly picking up but the premium wines are pretty much dead in Maharashtra. With such high excise duties hotels are afraid of stocking premium wines; they are sticking with cheaper wines.

Maharashtra's biggest importer, Sanjay Menon's moustache seems to be flying at low mast. He is quite reticent.' What can a few importers do? We tried our best in reasoning with the department. Despite all assurances that the increase will be rationalised to Rs.300 a liter, the government has decided to change direction, we have to live with the policy'

Like Mandla and other importers, Menon is also focussing on cheaper imported wines.

Sula's Rajeev Samant, part of the 'Bombay Club' (others being presumably, Sanjay Menon of Sonarys, Ashwin Deo of Moet Hennessey and Amrit Kiran Singh, Area Director, South Asia, Brown and Foreman of Jack Daniels fame) concedes the government has been harsh. 'Local industry certainly needs protection against cheap wines costing less than a Euro; else they'd be flooding the market and would threaten the very existence of our nascent wine industry. 'We were ok with excise duty of 150% for cheaper imported wines. The higher end wines don't compete with us so we would be ok even with the excise duty of Rs. 300 a bottle that one had presumed would be the final decision by the department.'

Ranjit Dhuru, CEO of Dindori based Chateau d'Ori is an importer as well as a producer. He is simmering because of the excise duty increase. The plea taken by the government of protectionism for the local wineries is unfortunate for the industry in the long run, he feels. Chairman of Aftek Ltd., a listed IT company with a Rs.400 crore ($100m) revenues, says,' We are not only exporting our products and competing with the rest of the world, but are also successfully running a German company we bought in 2003. Similarly, unless we have more imported wines, how can we Indian producers compete with them and take our quality to higher levels?' he retorts.

Dhuru also imports wines from Bordeaux. He had the wines crafted specially for the Indian market for as low as Rs.600 when 'I would love to sell them for Rs.400 but I can't, because of high duties.' Since the price increase, he has been obliged to increase the price to Rs.850 on the basic wines.

I had written on July 31 about DIAGEO, the world's largest spirits business, with a presence in the imported wine segment had hired KPMG consultants to fight the Indian government in the continuing row over its unfair and punitive tax regime,

Obviously Diageo must be happy now because their liquor sales will get a tremendous boost. The effect on the sales of imported wines like Blossom Hills etc. is a small price to pay to get the honey pot.

Genrally speaking, even EU are the net gainers because it is the export of Scotch whiskies etc that were being affected a lot more than the wines, at least in the short run.

I often cite the example of the auto industry in India barely over 20 years ago when we were happily chugging along with Ambassador and Padmini cars, strongly opposing any foreign hand, until the arrival of Maruti which touched the life of every Indian and helped make some of the finest cars not only for our own use but for exports. Imports of quality wines will help the industry develop rather than be strnagulated