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Delhi Wine Club

Posted: Monday, July 07 2008. 14:32

Karnataka Notifies Liberal Wine Excise Policy

The Karnataka Government finally notified on Friday the draft wine policy in the gazette, simplifying procedures for production and marketing wine in the State, allowing setting up and running of exclusive wine bars and promoting wine tourism.

The cabinet had already cleared the proposal earlier last week.

The notification has taken into consideration the main features of the "Karnataka Grape Processing and Wine Policy-2007 that had been formulated in March last year and announced in the budget of 2006-07.

State Vines and Wines

Modelled after Maharashtra, the 'Karnataka Excise (Manufacture of Wine) Rules, 2008', announced on Friday aims to increase consumption of wine and boost the growth of wine grapes, especially in the Krishna Valley, comprising the districts of Bijapur, Bagalkot and Belgaum.

The rules for issuing licence and permit to the wineries have been simplified. All licences would now be issued at the district level by the Deputy Commissioner who will clear such licence applications within 30 days.

Wine Bars and Taverns

To encourage wine producers and also to facilitate sales, the draft rule also permits sale of wine through wine-taverns (as they already exist in Chandigarh), for a one time fee of Rs. 5000 and a nominal annual renewal fee of Rs. 2,000 ($38). Licensees of wholesale trade in wines will also be allowed to sell wine in bottles in bars. However, no beer or hard liquor may be sold through such outlets.

Following the recommendations by the Wine Policy-2007, the additional excise duty on every litre of wine produced in the State will be reduced to Rs. 2, while the wine imported into Karnataka from other States will attract a four-fold additional excise duty.

Wine Tourism

Taking a cue from the California, Australia and New Zealand, the policy will seek to promote wine tourism in the state. To this effect, all licensed wineries will be allowed to sell wine to visitors for self-consumption.

The new liberalized policy also divides wine into two categories — fruit-based (natural) and fortified (have some amount of alcohol). It allows individuals to stock nine litres of wine as against 4.5 litres.

Wine Parks

The government has identified 1,000 acres for setting up two exclusive wine parks. Half of the land will be allocated to Nandi valley, comprising Bangalore urban, Bangalore rural and Kolar districts. The remaining 500 acres would be facilitated for Krishna Valley. These valleys comprise regions which produce good quality wine grapes.

The wine policy has been on the cards for at least a couple of years. Says Abhay Kewadkar, Vice President and chief winemaker for UB Wines division, 'We have been following with the government regarding this policy for 5 years now- through KAPPEC. We wanted the policy to be modelled around Maharashtra policy of 2001.'

Abhay used to be with Bangalore based Grover Vineyards as the chief winemaker at that time. Kapil Grover, partner and CEO of Grover is not too enthused with the notification, however. 'We had recommended the policy of charging Rs. 300 per liter on the out of state wines. We were told that this would be considered favourably. The notification does not address the issue of Maharashtra being unreasonable and charging us an additional excise duty which is four times the cost of manufacture.'

Abhay whose company UB is now producing wines in Maharashtra, feels two wrongs do not make a right. 'We should follow the policy of dialogue with Maharashtra instead.' During an earlier talk with Dr. B. Krishna, he had indicated to delWine that he did not wish to pursue crashing policy against Maharashtra either.

Paul John, owner of Chateau Banyan, based in Bangalore, with a winery in Goa  producing Big Banyan wines,is quite pleased with the policy in that it makes opening of wineries in Karnataka easier. 'No doubt, Karnataka has some  good regions for growing excellent quality grapes. We ourselves have bought 30 acres of land and I may consider starting a winery here. But the problem of Maharashtra charging exorbitant excised duty on out-of-state wines still remains. It is very disturbing that we are thinking of 28 different countries when we talk of wine and different states. I hope the central government can come with an integrated policy for the whole country.'

This is easier said than done. With the Constitution giving the states independent powers in implementation of policies regarding alcohol, with the states being run by different political parties, with many misinformed politicians equating wine with alcohol,with the elections imminent before the 5-year period, this seems to be a distant dream for the moment.

However, it seems to be a status quo for the imported wines and duties thereon, at least for the moment, according to Alok Chandra, the marketing consultant for Sovereign Wines in Bangalore. This makes Naresh Uttamchandani, partner of Sovereign a happier man as he expects the sales of his wines to go up in the anticipated mushrooming growth of wine bars.

Dr. B. Krishna, MD of the Wine Board which had announced the Wine policy last year, could not be available for his comments. A few more clarifications are needed by the Excise department and everyone concerned is focussing on the Gazette and trying to interpret it.

Watch for this space for more details and clarifications and the positive impacts on the wine culture in India.
Read some of our earlier articles on the subject at

For Highlights of Karnataka Grape Processing and Wine Policy – 2007 Click Here




Posted By : Rajeev Samant

July 07, 2008 18:33

It's really great news. Kudos to Dr. Krishna and his team. Bangalore already has the highest wine sales per capita out of the metros, and it is poised for an even bigger jump.


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