Grape growers to stop production to protest hike in excise duty

For Bengaluru's wine lovers, it could be a sour weekend as the Bangalore Blue Grape Growers’ Association has threatened to stop production by 50% from Thursday (June, 30).

P L Venkata Rama Reddy, president of Karnataka State Wine Producers’ Association told reporters on Tuesday that growers will be forced to take this step if the government levies 177% excise duty and additional excise on wine. The new duty will come into effect from Friday (July 1).

Reddy said the sudden increase in taxation will have a bearing on production cost and farmers will suffer. He, however, did not explain how an increase in excise duty will affect farmers. The state government issued a gazette notification on the revised excise duty on June 22, and gave seven days to file objections. The notification omits imposition of tax on manufacture of fortified wine from grapes.

``The government, through its wine policy, is encouraging people to drink wine citing health benefits while it is has omitted fortified wine from high taxation. This is double standards. Blue grape has natural spirit. But now, the government is indirectly encouraging increase of spirit content. It looks like the government is promoting French wine makers, rather than locals,” Reddy said. The wine growers’ association and farmers have submitted a memorandum to the excise commissioner and the government to reconsider the notification.

They will meet the district commissioner on Wednesday and have threatened to stage a dharna and even move court if there is no positive outcome. Grape cultivation and wine production will also be cut down by 50% from July 1, if the notification is not modified, added Rajesh Sathyanarayana, vice-president-Marketing, Rico Winery Pvt Ltd.