Food & Beverage News: Interview - Growth of the wine industry in Karnataka

Karnataka accounted for the sale of 13.95 litres of locally produced wine. The Wine Board and Wine Policy initiatives by the state government catapulted the growth of the sector. The state which is also the third largest producer of fruits in the country has been known for its grapes for the production of wine. Linking grape production with wine processing has provided the much-needed impetus for the growth of the wine industry in Karnataka, says Dr B Krishna, managing director, Karnataka Wine Board and Horticultural Producers’ Co-operative Marketing and Processing Society Ltd (HOPCOMS), in an interview with F&B News. Excerpts:

Could you highlight the factors driving the grape-wine industry in Karnataka?
Karnataka is one of the key states growing different varieties of grapes. Nandi Valley and Krishna Valley are considered as important grape growing regions in the state. Grape cultivation requires heavy investment of capital. In addition, to produce grapes of high quality, the farmers have to put in considerable efforts and pump in adequate investments, which often result in poor revenue generation. This is where the growth of the wine industry will play a crucial role to support the grape growers. The state has the right climatic conditions, soil and support from the government for the development of the wine industry. The value addition to the grape was the only way to promote the industry. Wine industry has also come under the aegis of the department of horticulture and food processing.

This move by the government has helped streamline access to easier financing modes among other benefits.

Could you highlight the opportunities in Karnataka for the promotion of grape growers and the wine industry?
There are plenty of opportunities for the production of wine. The climatic conditions in the state are best suited for the production of grapes suited for wine making. There is good demand for wines both in the Indian and international markets. Compared to global standards, consumption of wine in India is minimum and is growing around at 25-30 percent annually. We now needed to provide the right industrial environment for the growth of the wine industry. This includes rationalisation of taxes and single window clearances. These are the two factors to boost the production and consumption of wine. Only if we provide the impetus to wine production and marketing, is it possible for farmers to get good remuneration of their produce?

What are the opportunities for grape growers/farmers and entrepreneurs from Karnataka wine board?
Grape growers/farmers will now be able to get out of the market uncertainties by linking grape production with wine processing. Since the export prospect for wine is huge, there is always an opportunity to get additional profits.

With this background, there is need for an integrated policy as related to production and marketing of wines. This is where the state government formed a dedicated Wine Board and introduced the Wine Policy.

Could you tell us the efforts made to set up and grow the wine industry here?
For the implementation of the various programmes in the state, promote cultivation of wine grapes, research and manufacture, several promotional activities including exhibition, trade fairs, tour programmes and visits to wineries and industries within India and abroad were organised. To begin with, the government allocated Rs 4 crore to start off the various initiatives.

Could you in brief us about the Wine Board activities and the objectives of the Wine Policy?
Karnataka Grape Wine Board was established in 200 7 and renamed as Karnataka Wine Board in 2008, manned by 14 key personnel representing the horticulture, excise, export promotion council and industry, among others.

The key objective of the wine policy was to simplify licensing for permit for production and sale. Some of the highlights of the policy included winery licence fee of Rs 5,000 from the Rs 50,000. Permission was given to open Wine Taverns with a fee of Rs 1,000 and sell the wines separately with a fee of an additional Rs 1,000. A levy of Rs 300 per bulk litre is fixed for wine manufactured outside Karnataka. An additional special fee of Rs 300 per bulk litre was fixed for wine manufactured outside India and imported to Karnataka. Bottling of wine fee is charged at Rs 1,000 a year from the earlier Rs 25,000. Label approval and renewal licence of Rs 1,000 per annum is charged. Permission was granted to consumers to retain wine up to nine litres.

Post the Wine Policy, what have been the achievements of this sector?
The grape cultivation in Karnataka has increased from 600 acres to 1,800 acres. This has also resulted in the rise of wine production from 16-18 lakh litres annually to 20-25 lakh litres. A profusion of wine boutiques and wine taverns came into being because of the reduction in licence fee. From a mere two wineries: Grover Vineyards in Dodballapur and Hampi Heritage in Bijapur, the total number today is nine. Efforts are on to open another 20 in the state. The state government has allotted 141.2 acres at Thoravi village in Bijapur to the Wine Board for development of the Wine Park. This will provide employment opportunities and promote contract farming thus helping the growers get the assured price and income. The wine industries will also witness significant growth.

What have been the efforts of the Wine Board to educate the public on wine which is still viewed as an alcoholic drink?
Wine Board has encouraged the wine melas which have been an ideal platform to educate farmers and entrepreneurs to create an awareness on the wine cultivation, production and contract farming. In fact, such events have also attracted potential investments into the sector. We are also organising an annual Wine Festival. This year, the two-day event was held from April 10 to 11 and there was considerable interest in terms of attracting over 15,000 participants and a dozen speakers from India and abroad who addressed the cultivation, processing, marketing and wine appreciation aspects. . The allied sectors like food pairing and wine accessories also participated. Indian wine companies showcased leading wine brands like Kinvah, Big Banyan, Naka, Four Seasons were some of the brands. The imported brands included Wine Baron, Aspiri, Wine Dynasty. Over 100 brands from different countries like Chile, Argentina, US, France, Germany and Italy were also displayed.

What according to you needs to be done to take the wine sector on an aggressive growth path?
We need to look at wine festivals to be organised at the districts and in different parts of the country. There is also need to increase the frequency of such events.

On the levy front, a 10-year tax holiday is required along with more subsidies for the grape growers. A dedicated single window licensing authority would also be required to attract faster investments. In addition, there is also a need for one-point contact for permission in grape cultivation, wine production and its marketing. Wine sales should be detached from Karnataka State Beverages Corporation Limited. The Wine Board should be the licensing authority for wine boutique and wine tavern in addition to and label approvals. There is also need to set up premier institutes to generate qualified wine makers and carry out research on grapes and the wine processing technology among others.