The true beneficiaries of the new policy are importers like Brindco, Sansula, Global Tax Free Traders, & Mohan Exports etc., who I have often labelled as the ' Old World' importers. They were dealing in the liquor imports earlier and entered wine imports, sniffing a future opening. The opportunity turned golden when the government made imports duty free for the hotel industry, under certain easy conditions and they became the biggest wine buyers, cornering over 60% of the total trade paying zero import duty and with a sudden demand that outstripped the supply for a while.

It is ironic that while the basic duty on wine has been increased from 100% to 150%, the zero duty structure still remains the same for this powerful lobbying hotel group.

Beer importers will also be benefited significantly as the basic duty has been maintained at 100% and the costs will come closer to the domestic brand. Says Sanjeev Gupta, of High Spirits, who imports the German Paulaner beer, 'duty will come down from Rs.44 to Rs.24. It should become cheaper by Rs.25 per can.'

The 'old world' importers are hardly complaining. They are ready to reap the profits due to expected increase in sale, whether it is whiskey, beer or wine. 'And why not?' says Mukul Mehra of Global. 'We have been suffering losses for the last so many years. Now, when we can make some profits, why should anyone grudge that,' he adds.

With customs duty on Grey Goose vodka set to come down from Rs.1300 to 900, Absolute vodka dropping from Rs. 435 to 195, and the black label falling from Rs.1060 to 780 (and don't forget the reduction in the corresponding VAT @20%) he is ready to bring down the retail prices from Monday and is confident that the increase in sales will be significant.

He rues the price increase his premium wines are going to suffer, though. His popular brand Casillero del Diablo may see a drop in the customs duty from Rs. 340 to Rs. 267, but his proud possession Laurent Perrier will see an increase of duty from Rs.1224 to Rs.1383. Similarly, his premium Burgundy brand Joseph Drouhin will see a jump of Rs.180 per bottle in the existing duty of Nuits St. Georges, and the Chambolle Musigny will become costlier by over Rs.250.

But he is not complaining. With an expected overall sales growth of about 30,000 cases of imported wine during the 9 months of the year in the Retail alone, he is teeing up to share the bounty.

In the meantime, the Laurent Perriers and the Joseph Drouhins will keep wondering what hit them when The Great Indian Duty Cut that took place with the stroke of a pen on June the 3 rd, 2007!

And the palate of the hapless wine lovers will be deprived of an upgrade to finer tastes. He may even have to turn to the more affordable lifestyle alcobevs like single malts! I wish they would stick to Coronas, Heinekens and Paulaners, instead.

Subhash Arora
July 9, 2007

Indo Asian News Service picked up a variant of this article on Sunday, which has appeared in many newspapers. Some of these are:

Wine Prices go up as ACD goes away

http://economictimes.indiatimes.com

Beer, spirits get cheaper, wine will get dearer

http://www.dnaindia.com/

It also appears in Wine Business International as:

Duty Reduction Makes Premium Wines more Expensive

http://www.wine-business-international.com