Telangana revises penalty structure for domestic wines

In a major relief for the domestic wine industry, the Telangana government has revised its penalty structure for slow-moving domestic wines, aligning it with the rates imposed on wines by Foreign Liquor (FL). The decision follows persistent efforts by Kishan Pedhapally, Founder of Asav Vineyards, who highlighted the disproportionate penalties affecting domestic wine producers.

An official memo dated March 20, 2025, issued by the Revenue Department, confirms that the Commissioner of Prohibition & Excise and the Managing Director of Telangana Beverages Corporation Limited (TGBCL) have been permitted to delink penalties for slow-moving domestic wines from Indian Made Foreign Liquor (IMFL) and levy them on the same principle and rates as wines by FL.

Previously, domestic wines were subjected to penalties calculated as a percentage of their base price, making it financially unviable for producers, while FL wines faced a fixed penalty per case.

Following Kishan Pedhapally’s representation, the Managing Director of TGBCL reviewed the matter and noted that the high penalty structure was discouraging wine suppliers from entering the Telangana market. A report by the Price Fixation Committee, dated December 21, 2022, also recommended penalty reductions due to slow-moving stocks, citing that wine sales accounted for only 0.59 percent of total IMFL sales.

Under the newly approved structure:

• Stocks aged 90 days will incur a penalty of ₹5 per case per month.
• Stocks aged 180 days will be charged ₹25 per case per month.
• Stocks aged 300 days will face a ₹50 per case per month penalty.

This replaces the earlier system, which imposed penalties of 1.5 percent, 6 percent, and 12 percent of the supplier price per case per month for 90, 180, and 300-day-old stocks, respectively. While the revision is expected to ease the financial burden on domestic winemakers, TGBCL estimates a potential revenue shortfall of ₹29.77 lakh per month for the government.

Kishan’s relentless pursuit has driven a pivotal policy change that strengthens the domestic wine industry, making operations more viable for producers in Telangana. By aligning penalties with those imposed on FL wines, the government is fostering a fairer market landscape, ensuring a level playing field for both domestic and imported wine brands. “Hope the future of Indian wines in Telangana will get better with the cooperation of the government and unity of the Indian wines fraternity,” said the founder of Asav Vineyards.

With the new policy now in effect, the Telangana Prohibition & Excise Department will oversee its implementation, ensuring compliance and assessing its impact on the industry and state revenue.