Wine producers ask Maharashtra CM for assistance on loan, tax issues
Alekh Angre 17 February 2011

While grape growers in the state have suffered destruction of crop due to unseasonal rains recently, wine producers have been troubled by lower sales over the past few years. They are hoping that the chief minister will take up the issues with the Union government at the earliest

Wine producers in Maharashtra have requested the state chief minister for assistance in matters of financing and taxation, at a time when their businesses have suffered due to untimely rains that have destroyed a large part of the grape crop this season.

Representatives of the All India Wine Producers' Association (AIWPA) met with chief minister Prithviraj Chavan recently and discussed with him problems of small and medium-size wineries and grape growers like unpaid loans, high interest rates and crop losses.

Association leaders said that the chief minister had assured them that he would take up their issues with the Centre as soon as possible to find solutions to their problems.

Jagdish Holkar, president, AIWPA, said, "The chief minister said that he recently met the union minister for food processing and discussed the issues of wineries and grape growers with him. He also said that the state and central government would look into these matters and together come up with a solution."

The Association is seeking soft loans amounting to Rs90 crore, as well as interest subvention and loan restructuring option. "The wine industry is a holding industry and interest rate of 14%-15% is unaffordable," Mr Holkar said.

Grape growers are additionally burdened as they have not received payments from wineries for the past two years, resulting in their inability to repay loans. "The farmer is at the losing end as wineries still have to pay their dues for the past two years. There are also loan dues that the farmers are finding hard to repay," said Rajesh Jadhav, secretary, AIWPA.  

The grape-crushing season has begun in the Nashik and this year grape production in the region has been down to about 40% of the average annual production. A large part of the grape crop was destroyed by unseasonal rains in the area in November-December. But this is unlikely to impact wine production and supply as wineries have sizeable unsold stocks from previous years.

Mr Jadhav explained that "most of the wineries still have around 50%-60% of unsold wine lying in their tanks due to lower sales over the past three years. This years grape crop will contribute about 20%-30% of the wine production."

Mr Holkar hoped that the government would intervene quickly, to prevent dumping of wines by European producers who have good marketing and distribution channels.

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