Radico Khaitan has put on hold its plans to luanch locally wines from the stables of Ernest & Julio Gallo, the world's largest wine producer. According to Radico Khaitan director Abhishek Khaitan, this is because of the additional duty ranging from 70 per cent to 150 per cent imposed by the Centre on imported liquor.
"This has played havoc in the market. The price of imported liquor has gone up by 50 per cent after that," Khaitan said. The firm had put on hold its plans to launch beer rearlier this year.
However, Khaitan said the government was reviewing the duty and once it gets removed, the company would revive its plans to launch the range of wines.
While the government removed the quantitaive restrictions on the import of liquor effective April 1, it simultaneously put the additional duty. The duty is in addition to the 214 per cent customs duty on imported liquor. However, as per its commitment to the World Trade Organisation (WTO), India is committed to bring the customs duty down to 150 per cent by 2004.
In March, Radico Khaitan had announced an exclusive distribution venture with the US-based Ernest & Julio Gallo. The brands that were to be launched included Carlo Rossi (one of the company's most popular wines), Turning Leaf (a premium Californian wine), Wine Cellars, Andre (a popular sparkling wine) and Gallo of Sonoma County (made from grapes from Sonoma County, a coveted viticulture area).
The launch of these brands was slated for April. Now, the local consumers will have to wait till the government reviews its decision of imposing an additional duty.
The inclusion of Ernest & Julio Gallo wines in its portfolio was a natural expansion for Radico Khaitan. The company planned to leverage its nationwide distribution network to sell wines as well.
The bestselling brands in its portfolio are Contessa Rum and 8PM whiskey. Radico Khaitan operates the country's largest distillery at Rampur in Uttar Pradesh.
Globally, Ernest & Julio Gallo is present in every wine category ranging from generic wines to dessert wines. Its winery, started in 1933, is located in California.
