Wineries across the country have shown their readiness to pay the industry contribution that is required to keep the Indian Grape Processing Board (IGPB) running.
Recently, the Union finance ministry had stopped release of any fresh funds to IGPB, leading to doubts over the existence of the board. The term of the board, which was established in 2009, is slated to expire this month. However, IGPB chairman Jagdish Holkar is very positive about the renewal of the board’s term.
“Around 15% funds that were to be contributed by the private sector had not been collected as the industry has been in a bad shape for the last three to four years. The industry is now willing to pay up its share of contribution. The ministry of food processing industries will now put up a proposal before the Cabinet and the issue will be taken up soon,” he told FE. With just a couple of years remaining for the 12th Plan, the Board has decided to seek funds to the tune of R15 crore for the next two years.
Holkar said around 15-20 wineries have shown willingness to pay up funds so that the board continues to remain in existence. So far, this has been a major bone of contention with the ministry which had pointed out that some industry participation is also necessary.
Along with Sula Vineyards CEO Rajeev Samant, Holkar had recently met Harsimrat Kaur Badal, Union minister for food processing, a couple of occasions to apprise her of the need for the continuity of the board. Meat and Poultry Board formed under the ministry has already got the axe. IGPB faces the same fate unless some help comes from the ministry.
The wine industry in the country is still emerging and therefore needs the necessary push from the government, Holkar said. The size of the wine market in India is pegged at R2,000 crore. Last year, the board approached Sharad Pawar, former agriculture minister and got the ministry to sanction the funds of R30 crore for next 3 years with the government to give R25. 5 crore and the industry to contribute R4.5 crore.
However, no funds have been contributed by the industry, barring the membership contribution, he pointed out.
India became member of OIV in 2011. It remains unclear whether the annual membership charges are continued to be paid by the government, he said. India continues to be a member of OIV through the board and the ministry of food processing industries as the membership is for the governments only.
Meanwhile, the fate of the smaller wineries still seems uncertain with no clarity emerging on the purchase of bulk wines by larger wineries such as Sula Vineyards, Grover Zampa among others. A new state excise department circular now imposes 100% excise duty on the transfer of bulk wines because of which bigger wineries have now written to small suppliers saying that bulk transfer of wines is no longer possible. As a result, the smaller wineries find themselves staring at losses. Maharashtra produces 75% of India’s wine and table grapes and the remaining 25% comes from Karnataka, with some other states also now gradually entering the growing business.
Holkar termed the circular illogical adding that it is not clear if the government wants to make or break the industry through decisions like these. As per the 2001 State Grape Policy, no blending duty is imposed on wine.