Tamil Nadu to allow foreign wines in retail


In a rather sudden reversal, Tamil Nadu has opened its doors to imported wine brands. The move comes just a week before an EU team visits India to kick off WTO proceedings against the country. The EU team’s efforts were to focus on what they considered to be “discriminatory trade practices” in Tamil Nadu and Maharashtra. Shiv Singh comments on the never ending saga.

This reversal means that Tamil Nadu will allow the sale of imported liquor in retail outlets. According to the Economic Times, Tamil Nadu moved quickly to allow global giant Diageo’s four international brands to enter the state-run retail outlets. The Tamil Nadu State Marketing Corporation (TASMAC) placed orders for Johnnie Walker Black Label, Johnnie Walker Red Label, Smirnoff Black and Gordon’s Dry Gin with importing firm Brindco that is dealing in Diageo brands. They are also looking at other brands too.
The WTO and EU trade saga seems to be never ending. Some argue that the states aim to maximize revenue by skirting around the international agreements or complying with them in as tentative a manner as possible. Others believe that its just a matter of promoting and protecting local industry. That maybe the case to a certain extent in Maharashtra but Tamil Nadu has no local wine industry. And then of course is the question of how fair are the WTO agreements to developing countries like India when they protect western farmers too.
The fact of the matter is that we live in a globalized world. The World is Flat as Thomas Friedman likes to say and companies like InfoSys bring that philosophy to life everyday. The Central and State governments need to look carefully at their existing policies and trade practices when it comes to wine and other liquor. We live in a global world, and no country not even ours should expect to have its cake and eat it too. We don’t want to be taken advantage of by the rest of the world but at the same time we shouldn’t short change our own consumers. Maybe the first step is to delink wine from hard liquor so that wine (with its related health benefits when drunk in moderation) doesn’t suffer from trade polices and excise laws designed primarily for other liquor
For more on the WTO issue, read our earlier coverage.

1 Comment

  1. So the taxation merry-go-round continues! As SI keeps us up-to-date, my impression is that all this is really a positive sign because it can only lead to an eventual rationalisation of the taxation structure in the country.
    I agree with the view that wine should be taken out of the hard liquor category. There are many elements that distinguish it from regular spirits. Besides being proportionately low in alcohol, the manner in which it is consumed is entirely different. There is a certain style and tradition surrounding its consumption which an SI article headline in the print edition brought out – you don’t knock back wine to get knocked out!

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