BANGALORE/NEW DELHI: The international drinks industry clinched a decisive breakthrough with Tamil Nadu, among the largest alcoholic beverage 
markets in the country, opening doors to imported brands formally, sources said. The move comes barely a week before European Union (EU) team’s visit to kick off WTO proceedings against India for failing to remove discriminatory trade practices in two states—Tamil Nadu and Maharashtra.

Sources said Tamil Nadu, which has blocked bottled-in-origin (BIO) spirits and wines for long, moved hurriedly to allow global giant Diageo’s four international brands enter the state-run retail shops. Tamil Nadu State Marketing Corporation (TASMAC), which controls wholesale and retail liquor trade, has given price approval and 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.

According to sources, the four brands are hitting Chennai and other cities at the following retail price—Johnnie Walker Red Label (Rs 1,753); Johnnie Walker Black Label (Rs 3,605); Smirnoff Black (Rs 1,839 for one litre) and Gordon’s (Rs 1,681). A Diageo spokesperson confirmed the development, when contacted.

Sources said TASMAC was working on bringing more international brands through a formal tender process, even as the arrangement with Brindco will see it escaping a WTO case technically. Tamil Nadu has made tentative moves in the past to fall in line with WTO commitments, but never took a formal decision on pricing and placing orders. The pricing strategy adopted for Diageo brands include 24% TASMAC margin and 58% sales tax, sources added.

EU team is arriving for consultations with the Indian government on November 11. The original agenda included lack of access for international brands to Tamil Nadu and differential taxation for imported wines in Maharashtra and Goa. With Tamil Nadu opening up, much of the focus will now be on Maharashtra.

Maharashtra levies 200% tax on the declared value of imported international wines, and 150% on wines coming in other states ostensibly to protect its local grape farmers. Since 2001, the state has zero duty on local wineries as it went all out to boost locally made wine consumption. The international drinks community has been up against the local lobby, and the move to press ahead with WTO action may prove to be decisive in the case of Maharashtra as well.