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According to the liquor policy announced recently by the Rajasthan government, the existing label registration fee for wines will be increased from Rs.5,000 to Rs.50,000. The current registration for beer and spirits will also be increased from Rs.25,000 to Rs.50,000 thus bringing all three alcoholic beverages at par. It may be of interest that the registration charges for Indian wines have been pegged at Rs.75,000 per label, same as at the current level.
One can’t help being reminded of the first and the only National Conference organised by the Indian Grape Processing Board in Delhi a couple of years ago where I was also invited as one of the speakers. The then Minister of Food Processing Industry was quick to take the credit for his ministry for their successful efforts in delineating wine from spirits in India. Perhaps, it might have been just political rhetoric!
Currently the total market for imported wines is around 5000 cases in Rajasthan, according to a leading importer who feels that there is a tremendous scope for expansion. Interestingly, around 50% of wines are of premium quality as more of the tourists to the state are upper end visitors with a penchant for luxury travel. The policy would naturally be regressive and would be disadvantageous for such tourists who would have a much more restricted choice-distributors of imported wines are planning to cut their portfolios drastically, by up to 80%. The costs will thus go up also as the costs per bottle can be spread over a lower number of bottles sold due to lower market penetration.
Curiously, Indian wines have been at a relative disadvantage in the State with the label registration charges being much higher at Rs.75,000. For example, Sula Vineyards, that has a market of around 9,000-10,000 cases, hopes to increase its market share in the coming year. Arvind Vaid, Zonal Head for North for Sula says there has been an anomaly so far; thus the Australian Jacobs Creek would sell for Rs.950 in the retail shops whereas it was not feasible to sell Sula Dindori Reserve Shiraz for less than the existing retail price of Rs.1100. He is confident of improving his sales next year in this market with the new policy although he rues the discriminatory label registration fee.
In Rajasthan the sales have to be made through Rajasthan State Beverages Corporation Ltd. (RSBCL) which is a state government monopoly and charges a profit of around 7% on the sales. The excise duty is chargeable at 40% of the basic price to RSBCL. There are over a thousand retail stores selling alcoholic products in the state where Indian wines could be available. But the major sales are in and around Jaipur, Udaipur and Jodhpur followed by Jaisalmer, Ajmer, Mount Abu and Ranthambore to a lesser extent.
Rajasthan is considered to be an upcoming growth area due to heavy tourist traffic. With the new policy coming into effect in April, more imported wines will find a way into the grey market whereas Indian wines stand to gain-thus perhaps giving the state government reason to gloat over its policy for the fiscal year 2013-14 to be effective in April 2014.
Subhash Arora
Tags: Rajasthan, Rajasthan State Beverages Corporation Ltd |