Wine Consumption enjoys Exponential Growth in Pune

After metros it is now the second tier Indian cities that are enjoying an unprecedented boom. Pune, riding the wave of growth in the IT sector, enjoyed an increase of 62 percent sales of wine in the first quarter of 2007-08, as compared to the same period last year.

The excise records show a sale of 10,000 cases of 9 liters each in April-July in 2007 compared to 6,100 during the same period in 2006. This growth has been achieved although the state's declared policy of allowing wine bars to operate at nominal annual licensing fees- not yet announced, has not yet come into play.

Pune District alone has 11 wineries. About 90% of the Indian wineries are located in Maharashtra. Several political bigwigs own land giving a further impetus to the wine industry growth.

There is a good reason for this mammoth growth. Says Vijay Chinchalkar, Superintendent of state excise department,' A total excise waiver, i.e . zero per cent tax, is in effect for units producing wine in Maharashtra.' The waiver for 10 years was announced in the special excise policy declared in 2001. The policy had also reduced sales tax to 4% on the state-produced wines . When the federal government shifted to 20% VAT, this benefit was withdrawn. The producers are paying these taxes under protest and hope to get the current policy reversed.

This excise benefit is not available to the out-of-state producers (Grover being the major victim of this unfair policy), or the foreign wines. Excise duty of 150% on the manufacturing costs or the assessable value in case of imported wine is levied additionally to help the local growers stay more profitable.

Bangalore based 16 year old, Grover Vineyards has been obliged to buy and bottle grapes in Maharashtra for its newly launched Sante range of wines-only to save taxes. The company is scouting around for land near Nashik to 'save taxes and make our wine competitive in the Maharashtra market. We cannot ignore this market although our earlier details studies spread over a few years had shown that Maharashtra is not the best region for growth of wine grapes of quality, 'says Kapil Grover, Managing Director of the company.

Pune has been the automotive capital of the state. Of late, global IT players and the top Indian IT companies have made it an important base. The changing lifestyle due to the advent of InfoTech companies and the personnel engaged in it has resulted in wine gaining center stage as the alcoholic beverage.

As of now, the Pune district has only one exclusive wine bar 'Athena' at Narayangaon, owned by the largest producer, Chateau Indage. But 'more are expected to come up soon. The department has received letters of intent from prospective wine bar promoters', adds Chinchalkar.

Other second tier cities like Ludhiana, Jaipur, Pondicherry and Chandigarh are also witnessing similar boom.

Subhash Arora
August 12, 2007




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