The Delhi Government has finally given the green signal, after a lot of dithering. Actions are afoot to allow the sale of imported wine through the existing wine shops or any other outlets provided the seller registers with the local excise department and is prepared to shell out Rs. 200,000 for the L1 F license. This will entitle him to stock and wholesale to retailers and hotels and restaurants already holding the requisite liquor license. This will bring us at par with most other states where the sale has been allowed for the last couple of years. This step finally eliminates the anomaly where anyone could import wines due to Central Rules but could not sell it due to restrictions imposed by the local laws.

Due to each state having its own excise policies, Delhi has been in a peculiar situation where the sale of imported wines was allowed only through bars and restaurants that had the relevant excise permits to sell them. The so called wine shops could sell only Indian wines. Consequently, banquet halls that took specific license, L-20 to serve liquor were allowed to offer only Indian wines purchased through authorized vends. The customers ended up serving whatever quality was available. All this is about to change, finally.

There is expected to be a freeze in wine supplies for a few days till the systems are in place, L1 F licenses issued and the labels have been registered. It is going to be an interesting situation to watch. Some importers have labels running into three figures. Each label will require Rs. 5000 fees per label. This compares favourably with the label registration charges of Rs. 10,000 and Rs. 7,500 in Mumbai and Bangalore.

The new policy has been long overdue and is being welcome by the legitimate importers as it opens up a huge market for them. The consumer will be benefited as much bigger choice will be available, though the opening up will be gradual and steady and the flood gates are not likely to open. One has to consider the continued customs duty of about 250%, the excise vend fee of Rs. 150 per bottle (this has been made uniform for all the clubs, restaurants and hotels, earlier it varied from Rs. 120 -150), retail outlets' margin, local sales tax of 20 % on the total cost which will also have the burden of the excise license charges. But it will be a big relief and opportunity for individuals and corporations who would not mind paying more for these wines, provided it is legal and above board. One can also be surer of the product quality. 

Under tremendous pressure will be Indian wine manufacturers since a lot of the new sales will eat into their current market share. As an example, in a banquet party of 500 guests there may be 15 cases of wine consumed, costing about Rs. 400 per bottle. There will be enough supplies of imported wines now costing between Rs. 550 -700 which may replace the sale of Indian wines. Of course, Indian producers will either fight back by offering higher discounts or push their own portfolios of imported wines in an effort to lock in the customers. Retail level wine education will also become crucial in the new competitive environment. This will certainly include the proper understanding by the retails of the necessity of storing wines properly.

In either case, interesting times are ahead for wine lovers and wine knowledge will take a front seat. We shall keep our members and visitors up-to-date. For more details, log on to www.excise.delhigovt.nic.in

Subhash Arora