| Drink Scotch, NOT Champagne in Maharashtra-India | | | | By: Subhash Arora |  Page 1 of 2 next >> |
We have just entered a new paradigm in The Indian Paradox, a term I coined a few years ago to express my anguish and amusement at the happenings in and around wine drinking in India. The government of Maharashtra, by virtue of the excise order which reduces the excise duty from the recently introduced controversial and unjustified 150% to 75% for scotch and increasing it from the same 150% to, hold your breath, 200% on Champagne has recommended its denizens to shift from Champagne and fine wines to Scotch.
While the excise duty has been increased to 200% across the board on wines, there have been graded reductions from 200% (where assessable value is less than Rs. 1000 per case of 9 bulk liters) to 150%, 100% and 75% (where assessable value is more than Rs.5000 per case).
By declaring the policy, the government has taken the Maharashtra residents to the sixties in India, the days of Ambassador and Fiat cars when Marutis, Hondas were unheard of and Mercedes and BMWs were seen either in glossy magazines or were available to the elitist few through STC- a government canalizing agency. Fiat was available in ‘black’ and was on waiting list due to the allocation.
We are about to see the same scenario in wine. A few domestic ‘Fiat’ wines would probably sell in ‘black’ while the other Ambassadors will be ‘available’ at discounted prices or as ancillaries to the established producers who will sell them as ‘Fiats’. As far as the Mercedes and other imports are concerned, thanks to the open general policy of the central government they will be available but the price tag will be huge; they will not be for ordinary citizens.
To say the least, in this world of global liberalization where Gucci and Louis Vuitton, Ferragamo and Armani, or even Rolls and Bentleys are available freely, the imported wines have been gagged- in the name of protecting the Indian wine industry.
Would the order protect the Indian industry? I think not. Partially, at best. Imported wines costing less than Rs.100 ($2.5) a bottle will still give the Indian wines run for their money. Barring a few labels from Nashik and Bangalore, I could name 10 wines for every single label produced in Maharashtra that would still be a better value than the quality they produce right now.
One hoped that the survival instinct would force the producers improve the quality to compete with the better quality imported wines. Sula’s Dindori is a case in point. They could increase the price of their Dindori to Rs. 700 ($ 17) because they believed and the market concurred that it was a good quality product, better than even a few of the labels they have been importing on their own account. But how many Dindoris does Maharashtra have in its portfolio?
I remember a time in the seventies when the Scotch was sold in Bombay through the confectionary shops. You went to these ‘distributors’ and ordered in advance. In the evening, you could pick up a bottle or two lying in the bottom of an empty biscuit tin box for Rs.100-135. Perhaps, happy days are here again for these ‘distributors’. Bootleggers will thrive again in a big way and perhaps the confectionary shops will become the distribution points again. But is that the way to go in this modern age?
The world is full of exciting wines from different countries. Not even considering the health angle, the premium wines have already been made more expensive, due to the increase of cutoms duty from 100% to 150% due to the duty bound structure of WTO after the withdrawal of duties. This order has made the fine wines a luxury product, beyond the reach of middle classes of Maharashtra.
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