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July 2009 - Posts
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The Maharashtra Govt has finally announced reduction in excise duty on BIO wines and reduction in VAT on BIO wines from 25% to 20% and on domestic wines from 25% to 4% on 22nd July 2009
Note:
"The Maharashtra State has finally noted that due to high taxation, the BIO wine market was shrinking in size and reducing the revenue. This is a typical "Ambassador Syndrome" I call it Ambassador Syndrome because all babus in Govt are still allowed to use only Ambasaador car as official vehicle. They have not tasted the better cars introduced due to open market, which not only made better cars more affrodable and phased out Padmini and Ambassador, except for Govt. They now seem to realise that by protecting the domestic wine market by tariff barriers, they are actually depriving the consumers of better wines at affordable rates and since domestic wine producers can sell whatever they make due to artificial tariff barriers, they have no incentive to improve the quality and compete with BIO wines on quality terms.
I hope the new tax regime remains for a long time, though there is still a scope to reduce the VAT from 20% to 4% on par with domestic wines."
"I also hope that Goa, Delhi and Karnatka also follow the same taxation regime and reduce taxes in respective States"
Download the Tax Calculation Sheet from here
Ahuja
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The USDA-FAS (United States Department of Agriculture – Foreign Agricultural Service) joins the increasing number of International supporters and has officially endorsed the International Food & Drink Expo India 2009.
Holly Higgins, Minister Counselor for Agricultural Affairs at the US Embassy in New Delhi, says:
"As imports of consumer-ready food products continue to grow in India, we see great opportunities for U.S. food and beverage companies to be in this market"
The mission of USDA-FAS is to expand global markets for American agriculture. USDA-FAS has developed a relationship with IMEX Management who will organise a collective USA Pavilion at the show in order to expand market opportunities and exposure in India for U.S. food manufacturers and products.
SUSTA (Southern United States Trade Association) will be joining the USA pavilion at the show and appreciate the market potential in India. Bernadette M. Wiltz, SUSTA’s Deputy Director & International Marketing Director (Generic Program), says:
"With a population of over one billion and a middle class that is larger than the entire US population according to some analysts, SUSTA views the Indian market as an excellent opportunity for US food suppliers to increase their exports and for Indian importers to discover unique and varied food products from the Southern region of the United States. We see India as the "untapped" market with a vibrant economy; we are increasing our efforts to be a part of this and facilitate opportunities for our Southern U.S. suppliers in this market."
The International Food & Drink Expo India 2009 will take place 2 – 4 December, Pragati Maidan, New Delhi.
If you are interested in being part of the USA Pavilion, please click here
If you are interested in visiting the show to meet with the USA Pavilion participants
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The
Maharashtra government has decided to roll back VAT
to 4% from 25% The decision to raise VAT to 25% recently kicked up a
storm since investors in the business had got assurances of tax
concessions by the state government.
Wine makers in the state
had met Union agriculture minister Sharad Pawar for his intervention in
the dispute over the hike in VAT. Pawar, in turn, has asked the state
government to roll back the tax to 4%. Pawar's family has a stake in
the wine industry in Maharashtra. He also holds shares in the Four
Seasons Winery at Baramati owned by Vijay Mallya.
According to
sources, the low tax policy on wine would continue for the next 10
years. Apart from low VAT, the state's wineries enjoy low excise duty
as well.
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The
European Union will hold a meeting with the Indian Government in
September seeking redress of "discriminative" duties of up to 800 per
cent on imported wines and spirits imposed by some states.
"In September, EU trade Commissioner
will visit India to hold a discussion with Anand Sharma, Minister of
Trade and Commerce, to resolve the issue of discriminatory duties
imposed on imported wines and spirits," Ambassador, Head of Delegation,
European Union (EU), Daniele Smadja told reporters here on Friday.
"The choice of the venue, Delhi instead
of Geneva, is the sign of EU's willingness to solve this long dispute
and to allow India to bring all the relevant experts for constructive
discussions," Ms. Smadja said. More: Hindu
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California-based E&J
Gallo, the world’s second-largest winery by the number of cases sold, has
drawn elaborate plans to introduce brands from its global portfolio in India,
from September 2009, in a bid to cash in on the sharp growth witnessed in the
Indian wine market.
Gallo, which is also the world’s largest
family-owned wine company, has an existing JV with India’s second-largest
spirit company Radico Khaitan since 2001. It plans to bring in varietal wine
brands made from Chardonnay, Red Muscat, Cabernet and Sangria to the Indian
market.
The company also wants to bring in flavoured and coloured
wines to add to its portfolio. Raju Vaziraney, chief operating officer of Radico
Khaitan said: “We are targeting a 10% market share in India.”
Gallo’s Carlo Rossi, Turning Leaf, Andre Brut and Sonoma brands are among
the major brands that would be brought
here, he added.
The Rs
400-crore Indian wine industry crossed the million cases mark last year, out of
which imported wines alone account for 20%. E&J Gallo brands are sold in
India through Radico Khaitan’s distribution network, the manufacturers of
8PM whisky. The Indian wine market has grown between 20-35% in the past eight
years, which is very robust when viewed against the typical 3% growth seen in a
saturated market like Europe.
More: Economic Times
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The Indian Grape Processing Board (IGPB), in its maiden board meeting,
has decided to come out with short-term and long-term plans to deal
with emerging situations concerned to the wineries and farmers. IGPB chairman S G Chougule said, “The Board has met for the first
time and the body as a priority has decided to build a database of all
the stakeholders associated with the wine industry. Apart from that the
body has apprised the state government and concerned ministries of the
problems faced by the wineries.” He said that the sale volumes of
wine industry in the current fiscal year have fallen to 60 per cent
with small wineries issuing letters to the government that they are not
likely to crush grapes this year. In addition to recession, the
industry bore the brunt of 26/11 attacks in the form of less foreign
visitors resulting in fewer consumption of wine by the hospitality
industry. Chougule pointed out that increase in VAT coupled with
the introduction of highly-discounted pricing mechanism by wineries
also took a toll on the wine industry. However, he said that the body is already talking to various government departments to find a lasting solution. When
quizzed about any government intervention, Ministry of Food Processing
Industries secretary Ashok Sinha clarified that the government was not
getting involved directly with the problems associated with the
wineries and would allow IGBP to come up with its suggestions. More: Sakaal Times
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India is experiencing a boom in wine tourism. Many Indian
vineyards now have tasting rooms, so wine enthusiasts can enjoy
exploring India's wine regions. It's often possible to complete the
experience by staying at at the vineyards.
India's main wine region is Nasik, around four hours northeast of
Mumbai, in Maharastra. However, there are also some reputable wineries
scattered further south in India.
Visit these vineyards to enjoy some of the best wine in India. Sula Vineyards has a luxury three bedroom bungalow called Beyond,
which visitors can rent. It's located a short distance from the winery.
Beyond comes with private balconies, large living area, swimming pool,
and in-house chef who'll prepare delicious meals made out of organic
vegetables.
Location: On the outskirts of Nasik, off Gangapur-Savargaon Road, around 20 minutes drive from town. Indage Vinteners /Chateau Indage's winery has well stocked wine bar, where visitors can taste six
varieties for 150 rupees, as well as a wine shop. Those who are feeling
hungry can dine at the Ivy restaurant on the premises. Chateau Indage
also offers winery tours. If you arrive by 11 a.m. on weekends, you'll
be able to participate in a one and half hour a tour of the vineyard.
Location: On the outskirts of Narayangaon, around 85 kilometers (53 miles) from Pune on the Mumbai-Nashik Highway. Chateau d’Ori is a relatively new winery, who's first harvest was in February 2007. Significant effort is being put into developing the 400 acres of
vineyards as a tourist destination, with three artificial lakes for
boating and other water sports, luxury farmhouse accommodations, and
ambient wine tasting lounge. The winery's state-of-the-art technology
is also worth checking out.
Location: At the base of the picturesque Nhera-Ori hills at
Dindori, around 22 kilometers (13 miles) from Nashik on the
Nashik-Dindori Road. Grover Vineyards: To arrange your own personalized tour of the vineyard, get in touch
with Grover Vineyards at visit@grovervineyards.in. There are extensive
wine trails across the property, and it's also possible to visit the
winery's new barrel room.
Location: Nandi Hills, around 40 kilometers (25 miles) north of Bangalore in Karnataka. Tiger Hill Vineyards: The attractive thing about the resort is that it has a tasting
lounge bar, and offers a wide range of wines at view reasonable prices.
It's worth a visit if you're in Nasik to enjoy wine!
Location: Tiger Hills Vineyard Resort is located on the Mumbai-Nasik Highway, around 20 minutes drive from town. More: About.com
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United Spirits (USL), the spirits arms of the UB Group, is getting
aggressive with its retail play in India. The company plans to open a
wine bar in its UB City luxury mall in Bangalore and later a
large-format lifestyle outlet that will offer all its spirits and wine
brands. The outlet will have a restaurant section, a section offering
liquor-related accessories and a sports bar. Vijay K Rekhi, president and managing director of USL, told Financial
Chronicle that going forward, more emphasis would be laid on creating
the right kind of atmosphere to promote and market the company’s brands. More: Financial Chronicle
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Come July 10, select residents of India’s IT hub are expected to revel in the taste of the best, produced in Karnataka.
Conceptualised by the Karnataka Wine
Board on the lines of wine festivals popular in many western countries,
the city’s first wine festival is targeted to promote wine tourism in
the state. The three-day mela (festival) will be held in the Lalbagh
Botanical Garden, Bangalore.
Connoisseurs will get a chance to sample white, red and rose wines made in the state.
“Along with free tasting of wine, a
seminar will be a part of the wine festival to educate farmers,
industrialists and the public about wine cultivation, production and
contract farming in Karnataka. Opportunities available in the state
will also be highlighted,” L Shantakumari Sundar, development
commissioner and board chairperson, told IANS. More: Read It
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Since its official launch in April 2009, the International Food & Drink Expo India 2009 has gone from strength to strength, capturing the interest of global food & beverage producers who are keen to do business in India and local suppliers who are looking for ways to increase their market penetration.
The International Food & Drink Expo India 2009 is now delighted to announce its official partnership with IWBS (Institute of Wine & Beverage Studies) and Wi-Not Beverage Solutions Pvt Ltd. Both businesses are the creations of Magandeep Singh, India’s first French-certified Sommelier and leading F&B consultant. IWBS and Wi-Not will play important roles in the wine sector of the show.
IWBS, our Wine Education Partner, is the first establishment to run an internationally recognised wine course in India. IWBS will host the preliminary rounds of the Indian Sommelier Championship, with the final taking place live at the International Food & Drink Expo India 2009 on 3 December, in front of an expert panel of judges.
Wi-Not Beverage Solution Pvt Ltd, our Wine Activities Partner, will take charge of the Wine Tastings, delivering three days of creative tastings which will showcase the variety of wines exhibited at the show to India’s hotels, restaurants, wine importers and distributors.
Magandeep Singh says ‘IWBS and Wi-Not Beverage Solutions Pvt Ltd are proud to associate with the International Food & Drink Expo India 2009. India is currently showing 30% annual growth in the wine sector and has the biggest pool of young population with global exposure and expendable incomes. The global Indian with his taste for finer things has finally arrived. With a population of 1.12 billion, India holds tremendous opportunities: this is a good time to introduce new and exciting alcoholic beverage products into the Indian market.’
The International Food & Drink Expo India 2009 will take place 2 – 4 December, Pragati Maidan, New Delhi.
For further information relating to the Sommelier Championship, the Wine Tastings or the show in general, please contact Lauren Morrey on Tel: +44 (0) 20 8846 2772 or lmorrey@tarsus.co.uk
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Bailey believes that Indian wines are as
good as those anywhere else in the world. “You can grow grapes
anywhere. It is a common misunderstanding people have about Indian
wines being of low quality. I am trying to change that,” he says. 54-year-old Paul Bailey flew down from Australia
two years ago to set Deepak Roy's winery, Valle De Vin, at
Nashik Valley, Maharashtra. “I had never set up a winery but I knew
that the soil in India presented a lot of potential,” says the 20-year
veteran of wine industry, who is now chief winemaker of Valle De Vin.
He had earlier been chief winemaker with Jacob’s Creek wine in
Australia, and won the 2004 London International Wine and Spirit Show
for creating his own varietal of a red wine, the 1998 Gr Shiraz.
“This year’s harvest looks promising,”
says Bailey who will be rolling out a sauvignon blanc, cabernet syrah
and rose in August. “The sauvignon blanc is fruity while the cabernet
syrah has a lighter, dry red style,” he says. The prices range from Rs
590 to Rs 990 on retail. More: Indian Express
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Andre Morgenthal, spokesman for Wines of South Africa, said about
700000 litres of locally produced wine was exported to India last year. “This represents a 44% growth on 2007 figures. Morgenthal
said about 20 local companies exported between 30 to 40 wine labels to
India.
Morgenthal said despite the healthy growth, South African
wine was not as well represented in India compared to other
international markets. “India’s main wine consuming markets are the cities of Mumbai, Delhi,
Bangalore and Goa. Other cities like Calcutta, Pune and Hyderabad are
catching up. Nearly two-million people in India drink wine, with about
10% of this figure opting for wine as their preferred choice,” said
Morgenthal. Neethu Sheth, an importer of South African wine, said wine had
become one of India’s drink of choice in the last three years. “Wine is
quite popular and is becoming a drink of choice. With the terrorist
attacks and the global downturn the consumption has reduced drastically
due to the high custom duties. That inflates the price of the wine,”
she said.
Sheth, a wine lover and enthusiast who started importing
18 months ago, said her target was premium wines for up-market Indian
restaurants and hotels.
“I have 19 labels from South Africa, which are a fairly
good mix. The popular ones are Pinotage, Laborie, Le Bonheur, Le Riche
and Weltevrede. More: The Times.co.za
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After biding their time and pleading with excise and the local government officials, wine importers in Delhi have given up hopes of an immediate redressal, and are filing the fresh MRP for imported wines and spirits as required by the Notification issued on 8th June, reports Subhash Arora.
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The Notification made it mandatory for importers and distributors of imported wine and spirits to pay an excise duty of 30% on the MRP of up to Rs.2000 and additional 20% on the incremental increase in the MRP.
The wine importers who are a fragmented lot did their best to plead with the Excise Collector, Mr. Sanjeev Ahuja, the Commissioner, Mr. R. M. Pillai and some other government officials in the finance ministry. A group of importers met the Collector even today. But the only assurance they seem to have been able to extract has been that the policy may be reviewed and modified in 3 months.
Meanwhile, a leading importer has reportedly filed the new MRP, based on the higher excise duties and it should be business as usual for him during the next couple of working days. All the importers delWine talked to; also plan to file the list by Monday. Till then their business is under suspension as the Transfer Permits (TP) can be issued only to those following the notification instructions.
The business has been at a stand-still for the imported wine industry since June 8th when the Notification was issued. A small number of orders have been filled to meet emergency situation of some hotels, based on the old MRP lists and on the assurance of reimbursement of the extra excise duty from the buyer.
The importers are equally bitter of the tightened procedures which are increasing the cost and reducing the efficiency. The investments go up as well with the higher duties which have to be paid up front before the material can be taken out.
A ray of hope exists for those fine and expensive wines that are being sold exclusively duty-free to the hotels. It appears that the department might be willing to accept the MRP based on the duty free prices, thus keeping the duty increase under check.
It is far too early to assess the potential damage that will be caused to the imported wine industry in Delhi but as an astrologer might say, ‘Saturn has entered the House of Bacchus.’
Good News expected from Mumbai
In the meantime, Mumbai may reverse gear soon. As reported in delWine earlier, Maharashtra has been considering the reduction in excise duties perhaps due to the intervention of the central government. This review was promised in March, before the general elections. Unconfirmed reports inform that the duty is being revised downwards to Rs. 300 per bottle for MRP up to Rs.900, Rs.224 for the 901-5000 and 5% for bottles costing more than Rs. 5001.This would be the most logical step as it would keep the cheap imports at bay and protect the Indian industry at the same time encouraging the fine wines to come in the market and encourage the Indian industry to improve quality faster.
Sanjay Menon of Sonarys, Mumbai confirmed that the move has been in the pipeline-but he has not seen the notification yet. Sources point out that the change may be as early as 5-6 July, that is, coming Monday. While one waits for the good news with baited breath, the VAT on alcohol has gone up from the current 20% to 25% in Maharashtra, increasing the cost of already expensive wines even more.
If the new excise policy is announced as early as it is being speculated about, Delhi would perhaps become a state with the highest excise duty in the country.
Subhash Arora |
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