Big brother not needed

The government’s attitude towards wine has stifled its growth in India.

Growth and development boomed in India following the liberalisation of industrial licensing in 1991, but since alcoholic beverages are a state subject and one of the principal sources of state revenue, there’s little sign of any liberalisation here.

In fact, as reported previously, since most government authorities do not differentiate between spirits and low-alcohol beverages like wine or beer, the trend has been to increase taxes on wines (“wines are consumed by affluent sections of society”) and in general regard this product as a cash cow.

In states where a wine policy has enabled setting-up wineries (Maharashtra, Karnataka) the tendency is to protect the local industry (and tax wines from other states). Elsewhere in north India a winery has to incur massive annual costs to enter most states — and this is regardless of their sales volume. Small wonder that although there are over 60 wineries in Maharashtra, only a handful on new brands are sold in, say, Delhi.

One of the most insensitive state policies is practiced in AP, where the AP State Beverages Corporation (APBCL) is the canalising agency for all alcoholic beverage sales, whether produced in India or overseas. Not only does the state have the highest taxes on all alcoholic beverages (a VAT of per cent — no concession for beer or wine), the APBCL actually negotiates prices with vendors in the name of ‘protecting consumer interests’ and in doing so ultimately serves the interest of large producers (whose costs are lower and volumes higher).

When APBCL was mandated to also canalise imported alcoholic beverages from April 2010; their first move was to get all vendors to pay up front for the privilege — and form a ‘Negotiating Committee’ (none of whose members have any idea of international spirits or wines). Come end-July and vendors are still awaiting any sign of progress — meanwhile, hotel stocks have depleted, and popular brands are now the available only from your friendly neighborhood bootlegger.

At the end of the day it is you, dear reader, who pays for all this: wine prices in India are among the highest in the world — despite which wine volumes are slated to grow 20- 25 per cent annually in the foreseeable future, so the potential demand is actually much higher.

There has got to be a way out of this Catch-22 — perhaps we need to declare wine (and beer) as ‘food products’ and take them out of the purview of individual states. A start has been made with the formation of the ‘Indian Grape Processing Board’, but a lot more work needs to be done so that wines receive benefits due to a product that is low alcohol, farmer-friendly, and good for health.

Wines I’ve been drinking:
Wines made in Tuscany (Italy) with more than 15 per cent of Sangiovese grapes were called “those super wines from Tuscany”, shortened to ‘Super Tuscans”. I recently opened an IL Futuro IGT Toscana 1999 (40 per cent Sangiovese, 40 per cent CS and 20 per cent Merlot): smooth dense sweet tannins, balanced oak, with spice and berries and all that’s nice, and a lovely, long finish. Even though it had cost me 75 Euro in Verona, wish that such wines were available outside of the five-star hotels.

Cin Cin!

[Alok Chandra is a Bangalore-based wine consultant]