India’s oldest winemaker Indage Vintners, we learn, has not been making payments to suppliers and service providers ever since the beginning of this year. In a business that is dependent on a big public profile, the inability to pay its dues was the first indicator of how cash starved it is. Soon afterwards, it stopped paying employees, forcing some of them to approach the police. It was the vision of Indage's founder Shamrao Chougule that brought quality wine and champagne to India and it is his dogged effort that led to the discovery that large parts of Maharashtra have the perfect climate and soil to produce quality wine grapes. However, when it comes to running its operations, the group has always had its sharp peaks and troughs.
Several years ago, the company was pulled out of a financial mess through a generous restructuring of loans. This allowed it to take full advantage of the boom in wine sales that coincided with five years of India's blazing economic growth until 2008.
However, a series of over-zealous international acquisitions that went sour, expensive new brand launches and the prolonged lull in the market following the economic slowdown of 2008 have put the company’s finances in a precarious position again. In May, Indage closed down several regional offices and stopped accepting supplies from its several small wineries. Soon its market position began to decline and its nearest competitors, Sula and Grover began to eat into its market share.
Earlier this week, Indage landed into even more trouble after the West Bengal sales tax department seized its bank accounts for non-payment of dues. Apparently, any balance funds remaining in the account as on September 2009 were remitted to the sales tax department.
Moneylife had been trying to contact the company management for the past few days, but no one was willing to respond to our queries about the state of its finances. Vickram Chougule directed us to speak to his brother Ranjit Chougule, who did not respond to our calls. Earlier, Indage’s senior management had sought to play down employees’ fears saying the financial situation was only a temporary aberration and that the company would soon come out of it. –Sanket Dhanorkar[email protected]