According to the government notification amending the Bombay Prohibition Act, the present restriction of giving the liquor license only to hotels and restaurants serving food is being waived to allow opening of wine bars within the state of Maharashtra, provided they sell only wine-and that only from Maharashtra. "The amendment is aimed at helping local grape cultivators and wineries," says a spokesman of the state home ministry. No out of state wines or foreign wine will be allowed in these bars.
These bars will not be allowed to serve any liquor either, naturally. Any shop in Maharashtra can get the bar license by paying an annual fees of Rs.5, 500 (€ 100) except Mumbai where the annual charges will be almost seven times at Rs. 37,500 (€ 680).
Maharashtra wine industry as also the consumers have been lobbying hard for such bars. The government had already declared this policy before, but was not sure of the political fallout and so aborted its plan when criticised for encouraging "wine culture". It did go ahead in 2001 to announce various incentives including zero excise for 10 years for all state wineries. It has also unveiled a grape processing industrial policy with incentives like sales tax concessions, simplified processes and procedures, fixed license fees for 10 years and creation of a wine institute and a grape board for quality control, certification and export promotion.
The state government is increasingly adding barriers to the out of state wine producers though. First, it was Indian wineries like Grover who were bearing the brunt of this policy. Now, the entire wine loving population of Maharashtra is being subjected to drink the Indian wine in these bars no mater how poor the quality is. One shudders to think of our automotive policy in the previous century if liberalisation would have meant that Fiats and Ambassadors could produce as much as they liked but sorry no Marutis, because we ' want to encourage the local auto and spare parts manufacturers and would not allow any foreign car makers to enter'.
This is a definitely regressive policy in the long run. And it might result in polarization. What if tomorrow more people start producing wine in Karnataka and influence the government to put high, punitive excise duty on wines produced outside the state. What if Bhatinda starts producing the plonk in a bigger way and Punjab subjects wines from Maharashtra to additional duties? Or Delhi imposes higher duties for Maharashtra to neutralize these dumping duties? Are we going to create isolated states, each placing artificial barriers when the international barriers are being shattered in today's scenario?
What if the consumer groups take up a stand tomorrow and decide to boycott wines from Maharashtra because of its discriminatory policy? After all, there is plenty of foreign wine that can be made available now t prices competitive with Indian wines and in majority of the cases of better quality.
With the addition of extra 150% excise duty added to the imported wines and with the wine bar policy of not allowing any out-of-state wines, Maharashtra government somehow appears to be full of prejudice and disdain against outsiders. The pity is that in this myopic vision, it is bringing the remnants of license- raj back. It is pushing the state to the old days where the Fiats and Ambassadors were 'losing' money and pleading they would be ruined by the aggression from foreign cars.
We need some visionary to convince the government that competition is good for the consumer, it is good for the industry and finally also the exchequer. We need a statesman from the industry who realizes that to become a recognized wine producing nation, we have to learn to compete and compete aggressively. Rather than getting pressurized from the politicians or the producers with self interests, the state government should encourage foreign equity participation, encourage latest technology and equipment to come in, encourage education and awareness of the health benefits and harm that hard liquor can cause to the human body. It could even encourage exports through its policies so that the quality leapfrogs to higher levels at a faster pace.
It has, of course, been fair minded so far and has allowed any 'out-of-stater' to set up base in Maharashtra and join the bandwagon and participate in the present boom-sucking in Seagram, UB and even established players like Grover are obliged to join the you-can't-beat- them, join them policy. New players like Chateau de Banyan who have ambitions to see wine grapes grow a lot more in Karnataka are also being forced to fall in line and buy grapes from Maharashtra.
The government is welcome to offer special incentives like zero duty, single window handling, and simplifying procedures to its local heroes. But it should not be punitive to outsiders, especially when it harms the interest of wine consumer.
One hopes that they are re-examining the representation by the wine importers to consider streamlining the excise duties on imported wines and thus saving Maharashtra from becoming a bootlegger's paradise. One certainly hopes that they allow ANY wine to be sold from these wine bars.
If anything, they should frame a policy so that the cheap undrinkable plonk is not dumped down the customer's throat in these bars. Today the customer is not yet equipped or educated to grasp the finer nuances of wine. This is the area they could be looking at. The Sulas and Indages are fully capable of handling themselves whether it is the pricing or quality issue. It is the lesser and newer producers who need to be encouraged to improve the quality and not doled out subsidies, thus incapacitating them from facing the real competition and in the long run getting wiped out from the market which will become more discerning and competitive.
Wishing a Very Happy 60th to all our Indian readers.
It is ironic but unintentional that this article finds an editorial spot on delWine when we are celebrating our 60 th Independence Day.
Aug 14, 2007