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Delhi Wine Club
New Excise Policy Boon for Small Producers

Posted: Tuesday, 03 May 2011 18:51

New Excise Policy Boon for Small Producers

The last minute efforts by the Indian Grape Processing Board of having Mr. Sharad Pawar, Minister of Food processing industries meet with the top Brass of Delhi including the Chief Minister Sheila Dixit and the Excise Commissioner Mr R M Pillai in mid-March seem to have brought cheers to the small domestic wine producer, writes Subhash Arora.

The policy would be beneficial to small producers who want to enter with 2-4 brands to test waters in Delhi. Earlier, every producer had to deposit Rs.500,000 towards the license L-1 and assuming he would enter 4 labels, he had to spend 200,000 for brand registration (Rs.50,000 each) and Rs, 12,000 (Rs. 3000 per label) for label registration  (Total Rs.7,12,000) before shipping the first bottle for sale. Now, a producer may enter with say, 3 of his best selling labels (even 2 at Rs.240,000) and pay the license fee of Rs.300,000 and 60,000 towards Brand registration. At about half the earlier fixed cost, he can possibly enter the market with 3 instead of 4 labels.

Ironically, the policy may prove only marginally expensive for bigger producers like Sula who will not find it prohibitive. The producers with medium level presence, like Zampa and Grover with 5-8 labels will not be affected much; the cost may even come down marginally. The policy is thus favourable to both the small as well as medium size producers and not excruciating for bigger players.

‘Reduction of security deposit to Rs.25,000 per label from Rs.200,000 will also bring a lot of relief to the producers’, says Ashish Kohli, North India marketing manager of Zampa. This could be a significant factor for smaller producers.

Although the change seems to be too late and too little, it shows the comprehension and compunction on the part of Delhi government and one can say there has been thawing of the ice. Exactly how much – will become clearer when the details and exact excise levies are announced in a week’s time.

In the meanwhile the Delhi Excise department and especially the Chief Minister who took charge only a couple of months ago and with all the burning heat of Delhi and the CWG, deserve kudos and hopefully things will move faster for wines in the coming months and years and in the right direction.

Subhash Arora

Delhi Excise Policy 2011-12 (L-1)                                Delhi Excise Policy 2011-12 (L-1F)



Subhash Arora Says:


I think the people in the industry well understand if they are small or not. There is no official definition defining the small, medium or big producer. You should know that making wine in the house and selling is illegal on both counts. Don't expect to make 100 liters of wine in the house and expect someone in the excise department help you sell it in Delhi! By the way, in the world of wine we do not like to 'manufacture' wine-we 'make' it or 'produce' it. The exception may be when one buys concentrated juice and ferments it thousands of miles away. Again, this is not an official definition but a geneal practice. Subhash Arora

Posted @ May 11, 2011 10:22


Bhaskar Risbud Says:


This is a vague definition of small manufacturer.It should be clear on the basis of qty (in litrs)or by value of the product.Home wine maker makes 50 to 100 litrs of one brand and so whether it is small or big he can not afford to go with this fees.

Posted @ May 11, 2011 10:20


Subhash Arora Says:


You are right but a lot of appreciation is due to the IGPB who is keen to help the Indian wine industry with no other agenda. Subhash Arora

Posted @ May 09, 2011 11:08


Rajesh Jadhav Says:


Dear Mr. Arora, thanks for the update on Delhi Policy. This policy has specially influenced by Hon. Shri Sharad Pawar Saheb, Minister for Agriculture and MOFPI, GOI. This has been resolved during the common meeting at Krishi Bhavan, New Delhi dated on 15th March 2011 with Delhi Excise commissioner and collector. In that meeting Mr. Jagdish Holkar, President of All India Wine Producers Association and his team has given presentation on the current unjustified delhi policy for Indian wines and suggest some relaxation for small producers. Also IGPB help to make follow up and write to Delhi Govt. on Govt. platform which has resulted to change in policy. So we all have to appreciate our Hon. Ministers intrest to protect the domestic vine grape growers and wine producers by opening the door of Delhi market specially for small producers!!!! Rajesh Jadhav, Secretary, All India Wine Producers Association

Posted @ May 09, 2011 10:59


Gianander Dua Says:

lfie is full of Surprisses and one came to us in the form of Delhi excise announcing a relife for the small producers. thers is no doubt that it is the continus effort by IGBP, but at the same time it is also the effort by the wine magazine editors who have been writting it to prove that we need the changes to take place. we hope this effort continues as a group and we are able to challenge the changes in other states also to benift the producers and the consumers as, this brings in the direct effect to the cost of the product.

Posted @ May 09, 2011 10:52


Subhash Arora Says:

You are right but a lot of appreciation is due to the IGPB who is keen to help the Indian wine industry with no other agenda. Subhash Arora

Posted @ May 07, 2011 10:26


Kawaljeet Singh Says:

Dear Subhash Thank you for your article. We think it is a great step forward towards understanding the problems of the small winemakers like us and due credit to the IGPB and Mrs Vinod Kotwal for consistently voicing it on the industry's behalf. Also we must thatnk Mr PAwar, the G o D and Delhi excise for this step. It willmake it relatively easier for smaller players to launch in Delhi and look at business opportunity. We really hope that such logical steps towards removal of barriers and support sytems are extended by other states as well.

Posted @ May 05, 2011 13:40


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