Industry Leaders Sound the Alarm on Urgent Need for Reforms in Light of Unfair Practices
Mumbai, 29/8/24: The government of Maharashtra’s discriminatory policy has heavily impacted the alco-beverage industry, particularly wine made from fruits and honey. Grape wineries are being favoured, while companies like Hill Zill Wines Pvt Ltd, known for producing unique alcoholic beverages from fruits such as Chikoo, Star fruit, Mango, Strawberry, and Pineapple, are facing challenges. The company has announced its decision to shut down operations, and Moonshine Meadery is also expressing concerns following recent discriminatory policy changes by the Maharashtra government. This closure emphasizes the severe impact of unthoughtful government policies on the non-grape wine industry, including fruit wines and honey meads.
From 2001 to 2020, the Maharashtra grape industry flourished under the Wine Incentive Grant Scheme (WIPS), enjoying significant benefits such as exemption from excise duty and VAT rebates. However, these benefits were not extended to fruit wine and honey mead producers, who were excluded from receiving similar rebates even after the government announced a policy in 2017 to include fruit wines and meads under the wine category. However, post-2019, under the new reform act, a nominal excise duty of INR 1 per litre was imposed on wine from different fruits and honey mead. This resulted in the industry experiencing exponential growth, introducing unique wine varieties like Chikoo, mango, strawberry wine, honey mead, etc. The alco-beverage sector grew to the tune of 300% in spite of the government deciding to discontinue the INR 1 per litre excise duty benefit granted to the fruit wines and meads category only a year after it was granted. This was only because the grape wine excise duty exemption could not be continued further during the COVID-19 crisis, and the entire wine category (grapes, fruit wines, and meads) was levied an excise duty of INR 10 per liter.
The landscape changed drastically in February 2024 when the Maharashtra government revived its VAT rebate policy post COVID-19 crisis, offering retrospective (from 2020 – 2024) 80% value-added tax (VAT) rebates exclusively to grape wineries while neglecting the non-grape wine sector. Additionally, the majority of a substantial subsidy under the Wine Incentive Subsidy Scheme was funnelled to a powerful group associated with an initial public offering (IPO), further disadvantaging small and emerging fruit wine producers.
This discriminatory policy has dealt a severe blow to the non-grape wine industry, forcing Hill Zill Wines, among others, to shut down. The company’s exit marks a significant loss to the industry’s local economies and agricultural communities, a loss that could have been prevented with fair policies.
Speaking about this, Priyanka Save, Co-founder of Hill Zill Wines, said, “After years of hard work, it is devastating to see businesses collapse due to policies that continue to invariably favour the grape wine industry in the state while completely ignoring the potential and contribution of fruit wines and honey meads. We have no choice but to cease operations and explore opportunities in states that support innovation and diversity in wine production.”
Nitin Vishwas, Co-founder of Ronin Wines (Moonshine Meadery), said, “The abrupt policy changes have stifled growth and innovation in the non-grape wine sector. The government’s decision to provide VAT rebates exclusively to grape wineries is unfair and undermines the entire spirit of a unified wine policy. This is a major setback for an industry that has the potential to create jobs, support agriculture, and contribute to the state’s economy.”
Rajesh Jadhav, Secretary AIWPA (All India Wine Producers Association), urges the Maharashtra government to reconsider its policies to create an environment that equally supports all wine industry segments, especially small wineries, and pave the way for an integrated wine policy in the country.
