Wine importers and producers have a boom time in June supplying as much wine as they can, to the state owned monopoly Karnataka State Beverage Corporation Ltd, because the applications for next year’s registration renewal with the excise department will be taken in July but may not be available till September-October to most licensees, writes Subhash Arora.
The annual excise registration in Karnataka takes place on July 1. Not only is the label registration more expensive than many states, at Rs.10,000 a label (Delhi Rs.5000 a label), supplies dry up from July 1 till the licenses are renewed for the next year; it usually takes 2-3 months. This means that you pay for 12 months, but reap benefits for 10 months or less. Unfair though it may sound to our out-of-India subscribers, this is just a small example of what makes India a Paradox and no one dare raise a finger at the anomaly in the system.
Delhi importers are in the same boat. Interestingly, this year the excise department extended the licensing period for 15 days in April (Apr-Mar is the fiscal period here vis-à-vis Jul-Jun for Karnataka), ostensibly as they were waiting for the new policy to be announced. Many importers misjudged that excise duty reduction policy was imminent.
Importers and producers in Bangalore rush to KSBC Ltd. to supply as much material as they can afford to supply so that there is no sales loss due to this policy. Fortunately, everyone is geared to this problem and the hotels also pick up the supplies for the next couple of months’ requirement knowing that there would be no supplies due to circumstances beyond the vendors’ control.
The wine business booms in Bangalore throughout June. Brindco alone, the leading importer has reportedly supplied over 2100 cases of wine and spirits. Mumbai based Aspri has delivered over 1400 cases of (9 liters) for wines and spirits to KSBCL. As Sumedh Mandla, CEO of Aspri Wine says, ‘we have also maintained addition buffer stocks to meet market requirements for the next 4 to 6 weeks for the duty paid market segment.’ Ace Beveragez, predominantly a wine supplier, has supplied 750 cases and though its Director Debjit Dasgupta is all smiles, he also knows that he would be suffering the Bangalore blues for the next few months.
‘We will apply for the license in July but we normally get it in October. The excise department starts processing after a month-starting with local guys like Kingfisher who will probably be the first ones to get it. Usually, the Indian producers get preference over us for getting the renewal. This means no sales in Bangalore till October for imported wines,’ he says with a wry smile.
Aspri, the Mumbai based importer growing fast, is not so pessimist. Mandla says they hope to get their license in 4-6 weeks and expects it in his hand by August 15. Since they already have buffer stocks, he can afford this waiting period. Another person who is quite optimistic about the license is Chris Pohl who is importing Italian food, olive oil and wines through a company called Ammirato Foods Pvt Ltd, whose operations he heads in India. The Bangalore based- South African says he has never had any problems in renewal and he gets it in 4 weeks.
In all fairness, the excise rules allow the sale through KSBCL during this no-supply period so long as it has the material in store by June 30. Surprisingly, this is one government monopoly, the wine marketers are quite happy to deal with. Although it charges 7% commission and pays only when the material is sold, the tech savvy organisation automatically transfers funds to the supplier’s account every Tuesday which is a ‘payday’ for them.
In fact, the operations are much less prone to corrupt practices and are so well-oiled that a group of excise personnel from Delhi reportedly went to study the system but for incomprehensible reasons Delhi has not yet decided to adopt the system.
With a day left till the deadline for supplies, the party continues. It is pooranmassi (full-moon) for the wine trade but soon there would be 2-3 month amaavas (moonless night) ahead.
Subhash Arora
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