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Punjab's first commercial winery faces closure due to govt apathy

Neena Chaudhary in Kot Shamir (Bathinda, Punjab)

Kot Shamir, a remote village in the backwaters of the Malwa region, is where Punjab's maiden wine manufacturing unit was set up in 1993 amid much fanfare. Today, the unit is on the verge of closure.

The unit is situated in an area where vineyards have flourished and revenue collections for the state, thanks to the liberal drinking habits of the locals, swelled every year.

Farmers point out that political leaders and experts often persuade them and entrepreneurs to diversify into agro-based industrial units. But Punjab, India's leading agricultural state, requires a proper policy for value addition to its farm produce, especially from the field of horticulture, they say.

Golden Agro Winery is the only major (joint sector) unit to have been set up to make wine for commercial sales. Just when its Royal Visa wine and Diana Champagne had begun to attract customers, the Punjab Financial Corporation initiated recovery of its loan. This forced the unit to down its shutters for more than a month now.

It transpires that the departments concerned have failed to keep their assurances to promote the project.

The unit was set up by a former physiotherapist Subhash Garg who entered into an equal partnership agreement with the Punjab Agro Industries Corporation, a public sector undertaking of the state government. Both the promoters invested Rs 1.9 million each. The project's initial cost worked out to Rs 9 million.

The Punjab Financial Corporation agreed to extend a loan of Rs 5 million. Major concessions were promised in the state's 1998-99 Excise Policy to promote wineries and similar projects. It was decided to waive the levy of excise duty on wine manufactured in the state and allow its sale from beer bars.

The project, which was once viewed as a path-breaker in the field of agro-processing, is now in doldrums.

Garg blames it on the redtape in bureaucracy. The commissioning of the project was delayed by two years as various departments took their own sweet time to complete the different formalities.

The excise department put up hurdles, one after the other, while granting clearance to the labels required for pasting on the bottles prior to the marketing of the drink. Garg got a shock of his life when the government machinery swooped down on him and demanded prompt repayment of the loan.

According to Garg, who has been running pillar to post for relief, stocks costing Rs 15 million have been locked up by the PFC. "The state government has not lived up to its promises. I'm not allowed to market my product unless I get various formalities completed. How do they expect me to repay the loan?" he asks.

Since 1980, the area under the cultivation of kinnow and grapes in Punjab has grown from a mere 3,883 hectares and 308 hectares to nearly 27,500 hectares and 2,500 hectares respectively. While the production of kinnow has jumped from about 73,000 metric tonnes to 275,000 metric tonnes, grapes experienced a rise from 11.5 thousand metric tonnes to nearly 66.5 thousand metric tonnes during the same period.

The availability of grapes provoked Garg and his wife, who had received some training in wine making in France and Australia, respectively, to set up a unit in Punjab. In 1990, on an experimental basis, they used local varieties of grapes to make about 300 litres of wine of reasonable quality. The product was presented to some bureaucrats and experts in the field of agro-processing, who lauded the Garg couple for their effort and promised all help to start production of wine on a commercial basis.

Encouraged by the response, Garg quit his job in the prestigious Christian Medical College in Ludhiana and opted for a specialised course and training in the commercial aspect of wine-making. He also worked in some famed wineries in the Alsace region of France to gain experience in the finer aspects of the trade.

In his experiments, prior to setting up the unit, Garg managed to process the pulp of the popular variety of grapes, Perelette, into making some good quality wine. He also surprised many by making sherry and cream sherry, using grapes as well as the kinnow fruit. The Perelette grapes and kinnows had earlier been rejected for commercial agro-processing, which even resulted in uprooting of fruit bearing plants in orchards spread in the region.

Later, the state government began promotion of cultivating some other varieties like Muscat de Humberg, German Riesling, Chardonnay, Ugniblance, Sultana and Cabernet, which had been brought from California and France to be sown in the Bathinda vineyards.

On the basis of experience, Garg says all the varieties cultivated in the Bathinda vineyards were excellent for the production of red as well as white wines and sparkling wine, the latter being commonly referred to as the champagne.

Contrary to the opinion of many experts, Garg is satisfied with the quality of the wine produced from the Perelette variety of grapes, which according to him is a hybrid of the famous German Riesling. He points out 30 per cent of wine sold internationally is prepared from the Riesling varieties. He says that while Riesling is best suited for white wines, Chordanye and Cabrrenette along with a seedless local black variety could be used for red wines.

While he surprised many with the quality of the red, white and sparkling wines, Garg claims that the Bathinda kinnows could be used to produce good fortified wines as well as Sherries. He says that the potential of the area, which includes some surrounding districts of Haryana and Rajasthan, is under-exploited while the region is best suited for all types of wines, including the port and fortified ones.

However, the farmers of this region still shudder to recall that in the late 1980s and early 90s, grapes were sold at a rate of two kilograms for a rupee. However, the Golden Agro Winery has been paying encouraging rates. Garg claims that he purchased grapes from the farms of Punjab Chief Minister Parkash Singh Badal at about six rupees a kilogram the previous season.

Garg lists the problems he has had to face in marketing his products. While drinks with higher alcohol levels are more popular in the state, the liquor contractors have shown least inclination to market wine, insisting to sell wine at the same rates as that of regular Indian Made Foreign Liquor brands, arguing that the cost price of the two was identical. He has also been "rejected" for two years at least by the CSD canteens of the armed forces, which seek completion of certain formalities.

While help from any quarter has been elusive for him, Garg says that he had invested the savings of his family and that of his close relatives in setting up the unit. If the unit is closed and stocks are allowed to decay, he would be reduced to a pauper on the road, with no shelter for his family.

Garg proposes that like in Chandigarh and Himachal Pradesh, the Punjab government should evolve a system wherein wine manufacturers do not depend on liquor vends. The government should implement its proposal to allow the sale of wines with a prescribed alcohol content at selected provision stores and also permit the wineries to set up its sale outlets at chosen places in the state.

Meanwhile, A R Talwar, a senior official of the Punjab Agro Industries Corporation, a public sector undertaking, says that the corporation is quite interested in the success of the winery and has plans to encourage more such units, which in turn would benefit the farmers in getting better returns and handle the glut situations.

Talwar also says that the consumption of wine as a "health drink" should be encouraged to wean the people away from alcoholism. He says that there were no complaints regarding the quality of wine produced at the Golden Agro Winery.

Talwar claims that the Royal Visa wines had gained major acceptability among the people and a store in Chandigarh sold up to 20 cases in a short period. He said that Royal Visa wines had also been acclaimed at the recent trade fair in Delhi, where the Golden Agro Winery had put up a stall.

Regarding the recommendations made by the PAIC to the Punjab government in its Agro-Industrial Policy of 1998, Talwar says that sale of wine and light beer at departmental stores had been accepted. It was also decided to waive the levy of excise tax on the wines manufactured in the state, but the working out of the modalities had delayed the implementation of these announcements.

While Talwar is still quite hopeful of sorting the matter out for the Golden Agro Winery in the interests of the farmers of the state, the future appears grim not only for the winery but the farmers growing grapes on a commercial scale.

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