Boom or Doom, it Spells Maha (rashtra) Gloom for Imported Wines
The Maharashtra government has spelt doom for the imported wine industry by making a sudden volte-face and increasing the excise duty on imported wines from150% to 200%, bringing a boom for the state producers and casting a gloom for fine wine lovers
Despite assurances and unofficial statements that it was considering decreasing the duties from 150% to Rs. 300 a liter, the ministry has increased it to '200% of the assessable value or Rs.200 per bulk liter whichever is higher, for wine either in bottle or bulk, through a gazette notification, signed on November 12 th , but released today.
The order also spells death knell for many importers of Maharashtra and a gloomy future for all importers. 'Maharashtra hotels which consume 85% of the premium wines of the country will be the worst hit,' says Aman Dhall, owner of Brindco, the biggest wine importer.' It will be a big set back for the imported wine industry. It is totally arbitrary and the government does not appear to have applied its mind properly,' he told delWine.
Sanjay Menon is the biggest importer in Mumbai, who is a market leader in Mumbai. Talking to delWine from Paris, too dumbstruck for words,' the imported wine industry is finished,' he said. 'We were hoping that the government will see reason and reduce the excise duty , at least on the fine wines which are not even competing with the Indian wines,' he rued.
Says the Delhi based Naresh Uttamchandani, partner of Sovereign Impex,'Of course it will affect our Mumbai business but the bigger fear is that Maharashtra's example might be replicated in other states which would mean the imported wines will just not be affordable.'
Rajeev Samant who has been a supporter of a fixed duty per bottle as in UK and Singapore is in Italy and could not be available for comments. Sula and the other producers of Maharashtra will have now free run as there will be practically no competition from the foreign imports.
Even more surprising is the announcement of a reduction of excise duty to 100% and even 75% for better quality spirits, costing upwards of Rs.5000 (€ 88 a case of 9 liters). This means the excise duty on Scotch whisky and other premium liquors will actually come down.
The hotel industry will be adversely affected, bringing in a huge drop in sales and an unprecedented price increase for the consumers.
Fortunately, the other states have not taken any regressive steps as they do not have any local farmers to protect. But…
With the stroke of a pen the fine imported wine industry enters the dark ages today.
Subhash Arora
November 15, 2007
