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Rediff News  All News  » Business » Govt may set up beer board

Govt may set up beer board

March 07, 2006 11:13 IST

In an attempt to boost to the country's brewery sector, the Ministry of Food Processing Industries is proposing to set up a beer board.

The board, which is to be set up at the central level for promoting the domestic beer industry, would mainly focus on standardisation in quality, pricing and raw material sourcing.

The apex body is also aimed at bringing improvements in the farm sector in traditional states where barley, the key input for beer industry, is cultivated as a main crop.

Sources in the National Working Committee, formed by the ministry for suggesting reforms in the sector, said that the proposal for beer board follows the recommendations of a joint working group set up by the Food Processing Ministry to look into the issue of de-linking wine and beer from hard liquor.

Earlier, the working group had mooted the idea of setting up a wine board as an apex body for promoting the domestic wine industry.

The joint working group recommendations, which is included in the Draft Model Excise Policy of the Ministry of Food Processing Industries, aims at de-linking beer and wine from other hard liquor as far as taxation and excise policy are concerned.

The working group recommended preferential treatment for the industry to encourage diversification in agriculture, which would offer higher income to farmers and generate substantial employment opportunities, as well as counter large-scale imports by increasing domestic production.

Following the recommendations of the working group, the Food Processing Ministry had also written to state governments to reform the licensing of the wine industry and rationalise taxes and other duties to ensure uniform prices across the country and a seamless movement of these products across the country.

Sources said that the working group has mooted a uniform tax of 35 per cent on beer and 20 per cent on wine as part of the reforms to implement the same maximum retail price for these products across the country.

The working group, in its report, had also stressed on the importance of foreign investment in the wine industry.

Currently, foreign direct investment is permitted only in wine units set up under licences issued by the central government, while units under licences issued by state governments are not considered for FDI investment.

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C H Unnikrishnan in Mumbai