Dozens of Indian wineries weighed down by debt plan to ask for £20m of government money to help them survive.
While wine consumption in India is growing at 30% per year, the state of around 40 small wineries largely based in Maharashtra remains a concern for the industry.The All India Wine Producers Association (AIWPA) has said the survival of these wineries is at risk. It is preparing to ask the new BJP-led government in Maharashtra for 2bn rupees (£20m) on wineries’ behalf.
Rajesh Jadhav, general secretary of AIWPA and executive director at Rajdheer Wines – which is one of the wineries suffering from heavy losses – told Decanter.com, ‘At this month’s assembly session in Nagpur, Maharashtra, the association intends to submit a proposal to the government to provide 2bn rupees and facilitate a special “one time settlement” for the wine companies who are now facing legal action [relating to] heavy loans borrowed from the banks.’
Some of the wine companies in financial trouble are those who once supplied bulk wines to bigger producers.
The problem is generally thought to have started in 2008 after the market leader, Chateau Indage, went bankrupt. That left a number of smaller wineries and grape growers in trouble.
‘The state government created Wine Park in Nashik to support the small wine producers, but it did not help much,’ said an AIWPA spokesperson.
The trade body’s chances of success in seeking government money are far from certain. ‘The planning commission last year rejected the report submitted by National Bank of Agriculture and Rural Development (NABARD) to support the industry through a financial package,’ the spokesperson said.
Lack of money for marketing or distribution means ‘stocks [have] piled up in these 40 wineries, leading to an over-supply of around 200,000 cases’.
At the same time as seeking financial aid, the Indian Grape Processing Board, which controls AIWPA, is working to create a ‘Wines of India’ brand name to help promote wineries and their wines. Its marketing sub-committee includes 13 wine companies.
– Rojita Tiwari
(This news has originally appeared in Decanter.com)