Dec 01: In less than a year of its existence, Indian Grape Processing Board organised the first National Conference on wine, inaugurated by the Minister of Food processing Industries, Shri Subodh Kant Sahai at Hotel Ashok, Delhi, where the potential and challenges were discussed by a host of representatives of various governmental bodies and other stake holders, writes Subhash Arora who was invited as one of the speakers.
Photos By:: Adil Arora
Mr. Rajeshwar Rao, the dynamic Joint Director of MOFPI and the Vice Chairman of the Board and his team must be congratulated for organising the business like conference at the newly refurbished and refurnished Hotel Ashok which seems to have regained most of the past and lost glory in its new Avatar.
Informing the audience that they had studied the similar Boards of France, South Africa, Italy and Australia-some over 100 years old, he said that the decision had been taken at the ministry level since 2006 that the proposed Board should be industry driven and hoped that in 3-4 years the Indian wine industry would take over, under the ministry guidelines. He announced that technical committees will be soon formed to strengthen the board. Saying, ‘branding Indian wine is our biggest challenge,’ he admitted that ‘not all issues can be solved today’. Yet it was commendable that the Board under the direct and active support of the MOFPI could organise a national conference where not only wine producers but a cross-section of people including journalists, consultants, sommeliers and reps from the hospitality industry had been invited.
Addressing the delegates, Shri Subodh Kant Sahai admitted that it was difficult in a country like India to differentiate between wine industry and liquor industry but in 5 years of UPA govt. rule, things have changed with people asking for wine even as a medicinal beverage instead of liquor. Reminiscing about his trip to Napa Valley he said “we’d have tough time to compete with them because wine is a part of their culture.”
‘Ours is a rural economy. For the villages, we can create jobs in their door steps, with the wine industry. I also feel that the perishable products should be charged at 0 % excise duty and 4 % for non VAT products. I hope today’s policy would be helpful in forming a national policy.’ He invited the seven speakers selected from different segments of the wine sector and requested them to define the problems and suggest possible solutions.
It gave comfort to watch him sit through the presentations and computer glitches of some speakers so that he could get first hand information and the grievances of the wine trade to help the ministry make an action plan. UB’s Business Head, Abhay Kewadkar suggested that the rebate in sales tax of 16% being given as a refund ought to be changed and the hotels should be allowed to charge only 4% VAT instead of 20%, so that the customer gets a lower price. Dr. B Krishna, MD of Karnataka Board presented the Karnataka wine scenario where the wine festivals held helped educate the common man.. Jagdish Holkar of Flamingo Wines made a PPP with a charter of demands that looked like a trade union’s manifesto. He wanted lower interest rates, protection of farmers’ crops and prices, a common platform where government would help sell the wines produced by growers and of course what could not be sold ought to be allowed to be converted into brandy.
Begging to differ with the Honourable minister, Subhash Arora said that it was tragic that the government still refused to differentiate and de-link wine from liquor- the crying need of the hour. The prime example was even the naming of the Board which should have been Indian Wine Board or Indian Vine and Wine Board but due to political compulsions could not be named as such despite the existing example of Karnataka Wine Board that had not created any stiff resistance from the public..
The other indicator of his ministry being out of sync with the reality was that Delhi, a state ruled by the Congress party was not pro-wine at all. He cited the example of a small producer wanting to sell even a few cases of, say four labels of his wine in Delhi. He must first get an annual excise license for Rs. 0.5 million. then, he must shell out Rs.200,000 as label registration for the 4 labels @ Rs.50,000 each. This meant an initial investment of Rs.7 lacs, without making a single bottle sale- a heavy amount for a small producer thus effectively shutting this market for him. He urged the government to look into reducing these tax barriers and explicitly de-link wine from liquor without which wine industry has no bright future. He also exhorted the grower-producers to think of wine as a competitive business like any, and bring professionalism in marketing. He warned the industry against too much government interference or help that would empower it and will be counter-productive.
Earlier, Mr. Ashok Sinha, the visionary Secretary of MOFPI said that after seven good years, one bad year would happen in any business cycle and the producers should be prepared for the rainy day. He said, ‘We are dealing with a perishable quantity. The vagaries of nature also bring out the balancing nature,’ adding that wrong assessment of the market had also caused trouble for the Maharashtra industry, further clarifying that giving subsidies was not a mandate given to IGPB. He commended the Board for organising the participation of producers in Hong Kong for the first time under an Indian pavilion last year and taking them to London this month-Arora corrected him as Indian Wine Academy has been the first to have taken a small group of exhibitors at Wine for Asia in 2005, under the Indian flag, where both Indage and Sula had participated.
Mr. A M Khan, the Secretary of Industry of Maharashtra, was more specific and hard hitting in his lucid speech. Justifying the liberal policy announced by Maharashtra in 2001- recently being criticized for the current mess, he said there had been wrong assessment of the market. There has been consistent over production with only half being sold during the last few years, ’We need to look at it seriously and ask why was this situation allowed to happen? he said.
He was also critical of the producers not passing on the excise duty exemption to the consumers. ’When we gave excise exemption, the idea was to capture the market. Sales have gone up, but not to the extent that they should have. The reason is that the price benefits have not been passed on.’ He suggested that exports are important but tapping of domestic market initially is more important. Giving the example of Colgate and Britannia where they were selling the products of smaller producers, he lambasted the small producers trying to market directly and suggested they should form a common umbrella for marketing. He also did not spare the producers for not bothering about quality. ‘Reputed wineries have overpriced their wines. The wines must be of good quality. Some system has to be in place for certification,’ said the man who loves his glass of wine and said that drinkability of wines for a common consumer was an important factor to increase the wine culture.
The Honourable Minister sat through the entire proceedings making notes of the problems enunciated by different speakers-quite heartening and certainly leaving the stakeholders more optimistic. For a first time conference, it could be termed as a huge success though the presence of wineries, the main beneficiaries for whom the board has been formed, could not be termed as satisfactory.
Notably absent were Sula and Grover. Rajeev Samant informs delWine, ‘I had some other commitments and Pachpatil is abroad on vacation. We are in regular close touch with IGPB and Maharashtra officials, however.’ Kapil Grover of Grover Vineyards says he was tied up in Mumbai and had already regretted. Many smaller wineries like Vintage Wines, d’Ori, Vinsura, ND Wines etc were not present. Apparently, no winery from Karnataka was present.
This is not to say that some representatives of these wineries could not have been present. Whenever, there is a meeting with Mr. Sharat Pawar, the Minister for Agriculture, they’d run a marathon to be present in Delhi to meet him. The sooner they realize they have a potential ally in IGPB on the national level, the better the industry would benefit in the medium to long term.
The Board was formed last June only by the Ministry of Food Processing through the decision taken by the Union Cabinet in January 2009 to help develop of Indian wine industry. With the process of selection of Board members far from being transparent, it was feared that it would become another of the government bodies enjoying the benefits of the ‘gaddi’ . There were even cases of touts offering to get a seat on the Board in exchange for a fat packet. However, the officials, while admitting that the process of selection might not have been perfect have promised that soon the membership on the Board would be by elections. That makes the membership of IGPB even more important.
With several initiatives in the pipeline, including participation in the international wine shows and competitions, National Conference was just one of the ‘action’ sequence played out by the IGPB.
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