New Excise Policy Boon for Small Producers
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Posted: Monday, 11 April 2011 16:49
New Excise Policy Boon for Small Producers

The last minute efforts by the Indian Grape Processing Board of having Mr. Sharad Pawar, Minister of Food processing industries meet with the top Brass of Delhi including the Chief Minister Sheila Dixit and the Excise Commissioner Mr R M Pillai in mid-March seem to have brought cheers to the small domestic wine producer, writes Subhash Arora.

The policy would be beneficial to small producers who want to enter with 2-4 brands to test waters in Delhi. Earlier, every producer had to deposit Rs.500,000 towards the license L-1 and assuming he would enter 4 labels, he had to spend 200,000 for brand registration (Rs.50,000 each) and Rs, 12,000 (Rs. 3000 per label) for label registration  (Total Rs.7,12,000) before shipping the first bottle for sale. Now, a producer may enter with say, 3 of his best selling labels (even 2 at Rs.240,000) and pay the license fee of Rs.300,000 and 60,000 towards Brand registration. At about half the earlier fixed cost, he can possibly enter the market with 3 instead of 4 labels.

Ironically, the policy may prove only marginally expensive for bigger producers like Sula who will not find it prohibitive. The producers with medium level presence, like Zampa and Grover with 5-8 labels will not be affected much; the cost may even come down marginally. The policy is thus favourable to both the small as well as medium size producers and not excruciating for bigger players.

‘Reduction of security deposit to Rs.25,000 per label from Rs.200,000 will also bring a lot of relief to the producers’, says Ashish Kohli, North India marketing manager of Zampa. This could be a significant factor for smaller producers.

Although the change seems to be too late and too little, it shows the comprehension and compunction on the part of Delhi government and one can say there has been thawing of the ice. Exactly how much – will become clearer when the details and exact excise levies are announced in a week’s time.

In the meanwhile the Delhi Excise department and especially the Chief Minister who took charge only a couple of months ago and with all the burning heat of Delhi and the CWG, deserve kudos and hopefully things will move faster for wines in the coming months and years and in the right direction.

Subhash Arora

Delhi Excise Policy 2011-12 (L-1)                                Delhi Excise Policy 2011-12 (L-1F)

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