DFPI shoots down Bacardi bulk import proposal

Bacardi Martini India has sought government approval for bulk imports with export and ex-bonded warehouses sales and cash and carry wholesale trading without undertaking domestic retail trading in any form.

The Department of Food Processing Industries (DFPI) said the proposal, in its present form, cannot be supported as it intends to create inequity by not allowing additional capacity to be created by domestic manufactures under the industrial policy.

The department also noted that permitting bulk imports of alcoholic beverages will discourage indigenous production.

"With such imports, there would be no creation of employment, no utilisation of raw materials and no control on distribution," said the department, in its recommendations to Foreign Investment Promotion Board (FIPB).

The department of commerce however has supported the import, sale and distribution of the products either through bulk imports with export or ex-bonded warehouse sale or cash and carry wholesale trading mode subject to no retail trading.

The Department of Industrial Promotion and Policy (DIPP) too has approved the proposal subject to standard trading conditions, including the restriction on retail trading.

DIPP felt that since the bulk import of alcoholic beverages had already been permitted under EXIM Policy, the FIPB may consider the proposal subject to non-expansion of licensed capacity.

The board recommended the proposal for consideration and approval of finance minister.

Bacardi Martini India currently operates through a financial collaboration Bangalore-based Gemini Distilleries, in which the Indian partner holds a 26 per cent stake, and Bacardi having a 74 per cent stake in a paid up capital of Rs 31.91 crore. The balance 26 per cent will be held by Gemini Distilleries.