Retailer’s cartel in Maharashtra stifling the Wine industry

Maharashtra, the heartland of India’s wine production, is steadily losing ground to Goa due to its archaic liquor laws and cartelised retail structure. What is urgently needed is a transparent, fair, and professional system that can revitalise the industry. As Rajiv Seth aptly points out, key reforms such as issuing new retail licences to dismantle the cartel monopoly, creating dedicated wine retail spaces with trained staff, rationalising excise and customs duties, and streamlining bureaucratic processes will pave the way for a more competitive market. These changes would not only support small wineries and importers but also ensure that consumers have access to a broader range of high-quality products.

Maharashtra, home to 52 of India’s 54 wineries, faces a mounting crisis in its wine industry due to entrenched retail cartels and outdated excise laws. The state’s liquor licensing system, unchanged since 1974, has effectively blocked the issuance of new retail licences for over four decades. This artificial scarcity has allowed existing retailers to form cartels—ranging from five to 80 shops—that dominate the market and squeeze manufacturers, particularly small wineries and wine importers.

These cartels exploit their collective buying power to enforce unsustainable trade schemes such as “buy one case, get one free” or multiple free cases during new product launches. However, these promotions rarely benefit consumers. Instead, retailers absorb the discounts to boost margins, leaving wineries to shoulder the financial burden. For small and mid-sized producers, launching a new product often turns into a financial black hole. 

The exploitation does not end there. Retailers further impose exorbitant fees for shelf space, brand visibility, and promotional activities. Charges for point-ofpurchase (POP) displays, tasting counters, and even listing fees are disguised as “liquid charges” or cash incentives. This pay-to-play model creates prohibitive barriers for boutique wineries and importers without deep pockets, suppressing innovation and competition. Large liquor companies, with greater financial clout and cosy ties to excise officials, dominate the market, while smaller players struggle to survive.

Crushing Wine Importers

Wine importers are subjected to even steeper challenges. A 150 percent customs duty on imported wines is followed by state excise duties that can climb to 275 percent, all payable before the product hits retail shelves. After this financial strain, importers must still deal with cartelised retailers demanding free cases, high commissions, or excessive fees for shelf space.

Imported wines, often premium French or Italian labels, require informed staff to explain their origins, grape varietals, and food pairings. Unfortunately, most liquor shops lack trained sommeliers, leaving these wines to gather dust under improper lighting or temperatures that degrade their quality. Unlike whisky or vodka, which relies on brand familiarity, wines require a narrative—detail about the winery’s geography, the grape’s characteristics, or the wine’s ageing process. Without the guidance of informed salespeople, consumers remain unaware of these wines’ stories and attributes, limiting demand and stalling the growth of India’s wine culture.

Goa’s Progressive Policies

In stark contrast, Goa has implemented progressive alcohol policies that encourage new entrants and innovation. The state’s excise framework allows brand owners to lease bottling units by installing a wine or extra-neutral alcohol (ENA) tank, avoiding heavy capital investment. This system helps existing units earn jobwork income while allowing brand owners to produce and sell on favourable terms.

Goa’s liberal policies have positioned it as a hub for brand launches and innovation. Meanwhile, Maharashtra, with its bureaucratic bottlenecks and outdated laws, is losing excise revenue, VAT, and job opportunities to its neighbour.

Wine Retail Gaps

Wine Retail Gaps Wine requires a retail environment very different from that of spirits. Knowledgeable staff or sommeliers are essential to guide consumers through varietals, terroirs, and food pairings. Personalised service fosters brand loyalty and enhances the customer experience. For example, explaining the difference between a Sauvignon Blanc and a Cabernet Sauvignon or highlighting a winery’s sustainable practices can convert a curious buyer into a repeat customer. 

However, Maharashtra’s retail setup consists mainly of small, unregulated shops meant for quick spirit sales. These outlets lack the space, infrastructure, or staff expertise to cater to wine buyers. The absence of dedicated wine sections, temperature-controlled storage, or meaningful customer engagement prevents consumers from exploring new wines or making informed decisions.

Despite the high taxes on wine, the state fails to provide consumers with a commensurate retail experience. The focus remains on revenue collection rather than reforming policies to support industry growth and consumer education.

Economic & Cultural Losses

This inefficient and exploitative retail system not only stifles innovation but also inflicts economic losses. Many liquor brands have moved operations to Goa, citing Maharashtra’s rigid licensing regime, exploitative retailers, and bureaucratic inefficiencies. Goa’s tourismdriven demand, lower taxes, and relaxed norms attract new investments, costing Maharashtra crores in lost revenue and employment opportunities.

The situation is worsened by a system seemingly designed to protect established manufacturers. Lengthy approval processes, opaque decision-making, and resistance to reform discourage new players from entering the market. As a result, Maharashtra’s wine industry, despite its potential, remains constrained by structural inefficiencies.

Roadmap to Revival

To reclaim its leadership in the Indian wine industry, Maharashtra must undertake comprehensive reforms like cracking down on retail cartels and reforming excise policies. By dismantling monopolistic practices, fostering competition, and adopting Goa’s progressive model, the state can unlock the potential of its wine industry, attract investment, and meet the evolving demands of younger consumers. A new state retail policy should prioritise transparency, consumer education, and innovation, ensuring that small wineries, importers, and new brands have a fair chance to thrive. Only then can Maharashtra offer consumers a vibrant, diverse, and world-class wine culture while boosting its economy and creating opportunities for its youth.