Government Policies Harmfully Impair the Non-Grape Wine Sector and Cause Serious Repercussions

Industry Leaders Sound the Alarm on Urgent Need for Reforms in Light of Unfair Practices

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Mumbai – The alcohol beverage business, especially wine derived from fruits and honey, has been severely harmed by the discriminatory policies of the Maharashtra government. While businesses like Hill Zill Wines Pvt Ltd, which are well-known for creating distinctive alcoholic beverages from fruits like chikoo, star fruit, mango, strawberry, and pineapple, are having issues, grape wineries are being given preference. In addition to announcing its intention to cease business, Moonshine Meadery has expressed concerns about recent discriminatory regulatory changes implemented by the Maharashtra government. This shutdown highlights the serious effects of careless government regulations on the non-grape wine sector, which includes fruit wines and honey meads.

With the help of the Wine Incentive Grant Scheme (WIPS), which provided substantial advantages like excise duty exemption and VAT rebates, the grape sector in Maharashtra flourished from 2001 to 2020. Producers of fruit wines and honey meads, on the other hand, were not eligible for the same incentives. This was the case even after the government declared in 2017 that fruit wines and meads will be classified as wines. After 2019, nevertheless, wine made from various fruits and honey mead were subject to a minimal excise levy of INR 1 per litre under the new reform statute.

The business saw exponential expansion as a result, giving rise to distinctive wine varietals including Chikoo, mango, strawberry wine, honey mead, and so forth. The government decided to end the benefit of INR 1 per litre excise levy for fruit wines and meads category only a year after it was granted, yet despite this, the alcohol-beverage business surged by 300%. The reason for this was that the COVID-19 crisis prevented the exemption from excise duties on grape wine from being extended, so all wine products, including grapes, fruit wines, and meads, were subject to an excise fee of INR 10 per liter.

After the COVID-19 crisis, the Maharashtra government reinstated its VAT rebate policy in February 2024, bringing back 80% value-added tax (VAT) discounts that were only available to grape wineries (ignoring the non-grape wine sector). This marked a significant turnaround in the industry. Further hurting small and up-and-coming fruit wine producers was the fact that a sizable subsidy provided under the Wine Incentive Subsidy Scheme ended up going mostly to a prominent group connected to an Initial Public Offering (IPO).

The non-grape wine sector has suffered greatly as a result of this discriminatory regulation, which has forced several businesses to close, including Hill Zill Wines. The industry’s local economies and agricultural communities have suffered a great loss as a result of the company’s departure, a loss that could have been avoided with just measures.

“After years of hard work, it is devastating to see businesses collapse due to policies that continue to invariably favor the grape wine industry in the state while completely ignoring the potential and contribution of fruit wines and honey meads,” said Priyanka Save, co-founder of Hill Zill Wines, in response to this. She further added that they are forced to stop activities and look into prospects in states that encourage wine production that is innovative and diverse.

Co-founder of Ronin Wines (Moonshine Meadery) Nitin Vishwas stated, “The non-grape wine sector’s growth and innovation have been stifled by the abrupt policy changes.” The government’s choice to only give grape wineries VAT rebates is unjust and goes against the core principles of a unified wine policy. This is a significant setback for a sector of the economy that might boost employment, assist agriculture, and benefit the state, he added.

In order to establish an environment that fairly supports all segments of the wine industry, particularly small wineries, Rajesh Jadhav, Secretary of the All India Wine Producers Association, is pleading with the Maharashtra government to review its laws and clear the path for the nation’s first integrated wine policy.