A couple of years ago, I was invited as a speaker at a wine show called Fenavin, where importers were sponsored. I was there as a journalist even though I was reluctant to go as it was primarily for importers so that they could have B2B meetings with producers of their choice.
Principle of Five Ps
While speaking to the audience who wanted to do business with India, I advised them to follow my principle of 5 Ps: Price, Passion for India, Partnership in Sales, Personal Appearance and Participation in wine shows. The details of the following article I wrote, are valid even today though there have been gradual improvements in the scenario:
http://www.indianwineacademy.com/dm_130_item_5.asp
The Sixth Sense
Summarizing my presentation, I cautioned the exporting producers with the sixth P which I had deliberated excluded when I coined my dictum: payments. I strongly advised them to secure their payments and be reasonably precautious.
I was criticized by many importers who felt that I implied that the Indian producers are unfair, unethical or poor paymasters. I had explained to them that this was a mere precautionary and good commercial advice which should be followed by any astute businessman and did not reflect on India’s image or style of working.
Besides, DelWine and I are both for growth and sale of wine in India through fair trade practices. Whether it is buying bulk wine, bottling it and selling it as Indian wine at ten times the costs or whether it is importing against clear credit for a period and then start ducking and hiding behind recession, government policies or other lame excuses, is unethical and needs to be exposed at a proper forum and time.
Implicit in my assumption is that the fair payment terms allow for the shipment, storage and receivable period, which is well over 4-5 months.
However, there are people charging for services and not providing them. One such case is under scrutiny and might be shared under our ‘Red Alerts’ policy. Another importer who claims to be a food importer is known to avoid payments, conveniently changing the name of his enterprise frequently and is difficult to trace or be censured..
While it is difficult to prove a fraud has been committed and the Indian judicial system is unfortunately slower than a snail, it is important for the producer to check the ethics and the status of the importer- not an easy task. However, their embassies and commercial sections generally keep a tab and may be in a position to help. Indian Wine Academy offers the service of rating the importer at a nominal cost. But these are at best, indicators and not fool –proof methods.
Most countries have credit guarantee scheme run by their government, which gives 80-90% of the payment up-front but are not necessarily up-to-date with credibility of the importer. Unfortunately, wine is not like gold (liquid gold but metaphorically!) which can be imported only against cash or an L/C. Due to the excitement of getting a share of the golden treasure, producers throw caution to the wind and become an easy target - and pay for it due to their cavalier attitude.
Interestingly, a few months before Fenavin, I had been a speaker at a BRIC conference at Pro-Wein in Germany and a similar one at Vinoble last month in Jerez, Spain. The problem of payment is fairly acute in these countries as well.
Caution is the keyword
Barring one or two importers, and the otherwise joint ventures like Moet and Hennessey or Prestige Wines (JV with Torres), a majority of importers have defaulted with some producer or the other. If you as a producer would like to share your experience to warn others or as an importer, you feel I am talking in the air, please send your comments.
Meanwhile, India is a successful story- at least in the foreseeable future. Any transient stage of a new industry has its own similar problems. We, at DelWine would like to make the bumps less painful and dealing with India as much fun and enjoyable as a bottle of fine wine.
Subhash Arora |