JOIN USWine sales fizz, but hard liquor rules the roost
Wine consumption is on the rise in Karnataka, thanks to the State government’s special interest in promoting wine culture in urban areas.
The quantum of increase in the sales is not less than 10 lakh litres per year in the last three years. But the sale is nowhere near that of hard liquor and beer.
Popularising wine, a fermented grape juice, began in 2007-08 with the government coming out with a Wine Policy. Interestingly, advertising hard liquor as well as wine is prohibited in the State. However, the Karnataka Wine Board has been conducting programmes to promote wine consumption.
As much as 13.71 lakh litres of wine was sold in the year 2007-08 and there has been no looking back since. In 2012-13, the sales rose to 40.71 lakh litres, 51 lakh litres in 2013-14, and surged to 62.08 lakh litres in 2014-15, with the sale value reaching Rs 174.70 crore. The figures include the sales of fruit and fortified wine. The sale of alcohol-fortified wine is three times more than that of natural or fruit wine.
Wine Board Managing Director B Krishna is hopeful that the sale value would reach Rs 5,000 crore per annum in the next ten years if the wine consumption continues to grow.
Wine festivals are being restricted to six major cities including Bengaluru and Mysuru. The footfall at the Mysuru mela was 70,000 despite the entry fee. So far 35 wine melas have been conducted, Krishna said.
The growth in wine sales in terms value has been quite impressive. In the last three financial years, the growth is about 30-35 pc, which is higher than the sale value of Indian Made Liquor (IML) and beer. On an average, IML sale has increased by about 14 pc, while that of beer has went up by nearly 16 pc. Liquor is broadly classified as IML, beer and wine. All types of hard liquor falls under IML, while beer and wine are considered non-hard liquor as percentage of alcohol in them is anywhere between four and 14 per cent.
Lower revenue earnings
But in terms of revenue earnings, wine pales before IML and beer. The price of hard liquor and beer is far higher than wine and it is but natural for the government to get more excise duty from liquor.
The average sale value of IML in the last three years is Rs 13,530.85 cr and it is Rs 2,456.99 cr for beer. However, the sale value is only Rs 143.93 cr in respect of wine for the same period. The reality is that it is a Herculean task to turn switch the loyalty from liquor to wine.
Krishna said, “We had thought that it would be difficult to promote wine outside Bengaluru. But, even districts such as Mysuru and Belgavi have begun accepting the drink. Wine is more liked by middle and upper middle class people. It is still considered as elites’ drink.”
Liquor is taxed heavily in the State. There is excise duty as well as additional excise duty which come to nearly 65 pc on hard liquor. On a bottle of imported wine worth Rs 900, the tax itself would be nearly Rs 500. However, local wine does not attract much duty. It costs less than Rs 10 a litre.
Liquor, beer sales
IML sale value registers highest growth rate in Bengaluru division (six districts) - 15.21 %
Beer sale value registers highest growth rate in Mangaluru division (five districts) - 20.46 %
Excise duty and additional excise duty on IML is nearly - 65 % IML sale value in 2014-15 - Rs 15,226.16 cr
Beer sale value in 2014-15 - Rs 2,855.52 cr