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Delhi Wine Club

Posted: Friday, 25 June 2010 10:27

Wine Retail Opportunity for Producers Soon

The excise department seems to have suddenly woken up to find the Commonwealth Games on the head and after announcing new licenses like L53, L53F, L56 and L4 D, it is learnt that it may soon allow wine and spirits producer licensees to open one retail store exclusively for their own products against a special license, writes Subhash Arora.

The concerned minister Mr. A K Walia has apparently cleared a proposal to allow IMFL producers to open a retail store where they can showcase their own products by taking an annual license for Rs. 1 million. Sources state that another million would have to be deposited in the form of Fixed Deposit as security. The retail store could be started at any place, though it would make sense to open it in a mall due to higher footfalls and air-conditioning. It would be logical to assume that the selling prices would be the same as approved for any other shop in Delhi

Though no date is forthcoming but with the Games dictating many of the actions, the files seem to be moving fast and if it has to happen, now is the time.

However, there would still be some thorny problems to be resolved. If the license is issued to a manufacturer, it cannot sell the products of its sister concerns or subsidiaries. For instance, USL may sell its bagpiper; it may not be allowed to sell the Four Season wines. The license would be issued to only the licensee to sell products manufactured by them. If Nashik Vintners which is already registered for sale in Delhi in the excise department, it  could get the new license in the same name and wines produced in other units under a different name like Sula Vintners or Sula Select will not be allowed.

On paper, this policy may not be attractive to the producers at all. But if it can become an anchor store where the products of its sister companies (which can be defined in the policy) and everyone in the liquor industry-like USL would perhaps take the retail space.

Unfortunately, wine producers like Sula, Grover and Indage would not be excited about the news. Rajeev Samant of Sula says, ‘The speculated amount is too high for selling wine only. The amount would have to be made more reasonable- like Rs. 100-200,000 to make it worth our while to open a showroom to showcase our wines.’

At the National Conference held by the ministry of food processing industries, the Honourable Minister Shri Subodh Kant Sahay had made a startling revelation that his UPA government had been able to delineate wine from liquor, a mute point. This would be another opportunity to prove his point. He needs to impress upon the Delhi government that the license for wine producers must be at reasonable and much lower rates. Indian Grape Processing Board (IGPB) also needs to put its might behind the concept of a retail store for all the wine producers, at a license fee that thelicensees can afford.

Also next in line to be allowed to open one store ought to be the wine importers who are registered with the excise department and pay to register their labels at Rs.5000 each. They must be allowed to open retail shop-preferably at the warehouse where they stock their products; at a license fee that the  department considers is fair and not fleecy. After all, they also pay the customs duty and the excise license annual fee of Rs. 500,000, besides the hefty excise duty of 20- 30% on MRP

Subhash Arora



Bahman Marzbani Says:

The amount of duties to import wines into is ridiculous. India should learn from China and open the market to one and all. This will force the Indian wine producers to produce better quality wines at competitive prices. If India wants to export its wine products and succeed, then it should have a two way street and not a one Indian way street. it takes two to shake hands. If Indian wines are very good, they should not be afraid of overseas competition. Indians are smart enough to buy "desi" wines at more affordable prices.

Posted @ June 28, 2010 16:17


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