Karnataka vintners ready for Kerala wine harvest

Karnataka vintners ready for Kerala wine harvest

Can government policy change the alcohol consumption patterns of a population? 

A unique experiment is now underway in Kerala — by tradition a hard liquor consuming state — where the state government is directing the wholesale transformation of regular bars into wine and beer parlours. 

Already, more than 200 of 418 regular liquor bars closed since April last year have reopened in their new avatar as exclusive wine and beer outlets, following an amendment to the state liquor policy. More will join them as soon as they can convince excise authorities about their hygiene standards. For vintners across the country, many of them located in Karnataka, this is has come as an unexpected bounty. And they are preparing to make the most of it.

Kerala Excise Minister K Babu told Deccan Herald that the state will naturally witness a spurt in wine consumption. “As part of our new liquor policy, we had closed 418 bars across Kerala. Now we have reopened more than 200 of these closed bars and they are supplying wine and beer. This will increase the consumption of wine and beer in the state,” he said. To meet the growing demand, the government is issuing tenders via open bidding, the minister said. 

“Kerala’s growing demand for wine is really a boon for companies outside the state, especially Karnataka. But I do not have any information on the purchase done by the state from outside Kerala,” the minister said.

When contacted, Heritage Wines Managing Director P L Venkatarama Reddy said that the new policy would have a positive impact on the wine industry. “It is the right decision which will really change the drinking culture of our country. Europe and America have already undergone the shift. It will really increase demand for wine in coming years. For the past five years, we had been supplying 600 to 800 cases to Kerala per month. It will double soon. Normally wine is filled in 1,000 ml, 750 ml, 375 ml, and 180 ml bottles and they are respectively packed 9, 12, 24, and 48 bottles per case,” said Reddy. 

Kerala’s new liquor policy was first announced in August 2014. Originally, it was decided to restrict liquor sale to only five-star hotels and reduce in phases the number of outlets run by the Kerala State Beverages Corporation, the state-owned BevCo, which is the monopoly buyer and seller of wholesale liquor in the state. As a result, 312 private-owned outlets which did not have the five-star tag lost their right to sell. 

They have subsequently gone to court questioning the policy. Another 418 bars were already closed since April 2014, when their licences were not renewed. It is these closed bars which are now reopening as wine and beer parlours after the policy was tweaked in December last year. 

If the 312 outlets lose their appeal in court and the state policy prevails, they too would be allowed to operate as exclusive vendors of wine and beer. So the impact of this large number of exclusive beer and wine outlets could be considerable. The wine industry in the state has already taken note.

Karnataka Wine Board Managing Director Bellur Krishna said that a sudden spurt in demand for wine from Kerala is inevitable, and will definitely impact the wine business in Karnataka. “Wine producers must encash this opportunity, which is a boon for their business.” 

There are several wineries based in Bengaluru, including Heritage Wines, Nandi Winery, Grover Vineyards, and Big Banyan Wines. Many wine producers are also believed to have been holding talks with distributors in Kerala to understand demand there. Referring to the prospects for growth of the wine sector in Kerala, Krishna said, “It is a mixed market. So it is hard to say how fast the wine market in Kerala would grow. But it would take approximately a year or so to measure and understand where growth is headed.”

Krishna added that in order to popularise wine, seminars and other events could be organised around the theme over a period of time, where distributors could be invited to sample many flavours of wine. “The idea is to educate people to switch from hard liquor to soft liquor, so that they choose to drink wine,” he added.Wine consultant Mohan Rao said that there is a comprehensive change in Europe. “While in India the consumption of whiskey is growing, it is on the decline in Europe, where the youth is moving to beer and wine. The new policy shift will lead more youth to beer and wine,” said Rao.

Besides Karnataka, wine producing regions in India include Nashik, the country’s wine capital. Goa, Himachal Pradesh, and Champhai (in Mizoram) also produce wine. The country’s per capita consumption of wine hovers around 10 ml per annum, or two teaspoons, according to a report by the Indian Grape Processing Board (IGPB). The Centre, in association with IGPB, is planning to harmonise Indian wine standards with the International Organisation of Vine and Wine (OIV) guidelines this year.

According to the US Department of Agriculture’s GAIN report, last year, India exported almost 1.8 million litres of wine, worth $7 million. Wine production in Maharashtra and Karnataka was an estimated 14.2 million litres (1.58 million cases) last year. 
Karnataka’s production increased to 5 million litres (555,000 cases), last year, an increase of 1.3 million litres (145,000 cases) year-on-year. The state is also witnessing a spurt in wine sales through supermarkets. DH News Service

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