Business
'Indian whisky not up to world standards due to tax structure'
Kolkata, Feb 20
The quality of Indian whisky
cannot grow to globally acceptable standards, despite the annual
domestic market surging to nearly 2.8 million cases primarily, due to
the cost and taxation structure in the country, an industry veteran said
Friday.
"The maturation cost (for whisky) is very high. If one
wants to make whisky as per global standards, one has to remember two
things - malt costs are very high and we don't have enough quantities of
grain. The grain we (Indian distillers) use is predominantly local
rice," managing director of spirit maker Kyndal Group Siddharth Banerji
said here.
Global standards for whisky underline the alcoholic
drink should be based on grain, mainly wheat and malt, with a minimum
ageing requirement of three years in wooden barrels or caskets. The
process also requires an optimal temperature between 15 - 18 degrees
Celsius to narrow down evaporation.
Banerji said since the cost
of procuring the malt and related ingredients of the alcoholic drink is
high, it becomes cumbersome for distillers to produce the spirit.
Furthermore, Indian temperature isn't optimal for its manufacturing.
"We don't have surplus production of grain," he added.
According
to Banerji, who possesses extensive experience in the liquor industry
having headed different major companies, it is also expensive in India
to mature the grain for three years.
"In India, you get taxed the
moment you produce. So, the years you will be keeping the grain in the
barrel you will be paying tax... (Indian) taxes are not designed for
whisky (production)," he said.
Banerji said India accounts for 30
percent of the flavoured whisky market globally, and the domestic
market is growing at a rate of 10-12 percent annually.