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Posted: Wednesday, 19 December 2018 12:05

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Blog: State of the on- Trade Wine Market at MKT an Eye Opener

Dec 19: The recently opened upmarket restaurant MKT in the Chanakya Complex by DLF in Chanakyapuri has an excellent ambience, multiple cuisine dishes a majority of which would go very well with wines which are also available in temperature-controlled Enometic machines and are seemingly fairly priced in the heavily tax and multi-layered expense regime, but the sluggish sales is the reality that hits you on inquiry, writes Subhash Arora who rues the hurdles faced by the consumers and importers/producers alike today

The MKT Restaurant at Chanakya opened in May 2018 and has been Talk of Town for the chic ambience, surroundings and excellent international food- at reasonable prices, with people willing to wait their turn. It also has a rather compact wine list with 2 Enometic, 8-bottle dispensers. 16 wines-by-the-glass with a List that is refreshed regularly and ought to be welcome for wine lovers.

Size is right

Wines are available by the bottle and are generally priced between Rs. 3500-9,000- except Champagnes (Dom Perignon 2009 priced at a cool Rs. 35,000) which are not available by-the glass. Kudos to the person who decided to move away from the now-established norm in India of 150 mL single serve and chosen 125 mL pour as the standard. Around 12-15 years ago when the pour had not become a standard in India, the option was to choose 125 mL or 150 mL (some restaurants even used to be cagey and only verbally told the clients they were serving 150 mL while at times I found  them serving 125 mL for reasons best know to them. (Most restaurants now mention the pour size now-as it ought to be in all Wine Lists)

As a proponent  for 125 mL pour for India I always had my reasons- 25 mL less in the glass is not significantly less, but it costs that much less and would psychologically encourage a person to order a glass. More importantly, one could order 2 glasses of different wines enabling him/her to taste two different wines instead of one and also 250 mL is just right for drinking the correct quantity of wine to keep it moderate for health reasons.  Unfortunately, the Indian market chose the later- 150 mL, which in any case is more of an international standard for obvious reasons.

Pricing is fair  

I would not sing songs about the wine prices at MKT but if one goes by the dictum that the prices in a restaurant in India are normally 7 times that of the retail prices of the wine overseas, the restaurant is on the button. A glass of De Loach Pinot Noir at Rs. 750 or a Mendoza Malbec from Norton or a Koonunga Hill from Penfolds at Rs. 700 a glass each are affordable but if you were to order two glasses of slightly better wines, you are out of pocket for Rs. 3,000 (inclusive of 20% VAT and 10% service charge). I am not sure how many would be willing to spend that kind of money per person for casual dining.  Of course, these prices are on duty-paid basis. Quite steep considering that the food dishes hover around Rs. 500-700 each mostly.

The result is obvious-the sales are quite poor- to the tune of around 4-5 cases per month (50 bottles a month), according to a manager. He likes to explain away that this is a cafe type of a restaurant and the people who come here like to order a quick meal and thus do not order any wine or alcoholic beverages-in which case why even have the pretense of storing, displaying or selling wine and investing money, I wonder.

This story is repeated at almost every restaurant. What suffers is the wine consumption. Honestly speaking, I cannot see myself spending Rs. 3,000 on wine when the food costs around Rs. 1,000 pp. There might be a few who can afford to spend this money but they are a part of the 50-bottles a month category. I also don’t agree with the presumption that if the prices are kept too low (I believe 100-150 % margin on wines is reasonable in order to sell bigger quantities), people find it is a low quality wine.  The presumption that the person can order a glass of wine at Rs. 400-500 and sit around, occupying the table, is also not justifiable.

It’s a universally accepted theory that if the taxes were lowered, the wines would get cheaper and people would drink more. Similarly if the profit margins were reduced, the wine lists would look more attractive in terms of prices to order and not just skimming over. No judgement on the pricing policies but it explains the current situation in the on-trade; at restaurants like MKT. There are plenty of dishes that cry out for wine and bubbly. But it is not easy to expect people to shell out Rs. 13,200 on a bottle of Taittinger (Rs. 10,000+VAT @20% + Service Charge 10%). Even if one were to order the Indian bubbly Chandon, one is out of Rs. 1200 a glass or Rs. 2400 for two glasses-a third of the bottle.

Someone might argue that the prices overseas also see a profit margin of 250-300% in overseas restaurants. But at most Italian restaurants the margins are much less and the wine is very much ordered as a part of the food. I have purchased Tignanello (MRP-€50-60) at €70 a bottle and a Gaja Barbaresco €120 a bottle (DDF price at Delhi airport is $250) though these are more an exception.

It is also true that there does not seem to be much awareness and promotion of wine at the restaurant, besides an impressive, oversized Wine List. As a guy dispensing wine using a card explained, ‘initially, we procured cards that can be calibrated for different quantities and  inserted in slots for the appropriate value of wine to be debited on the card.  (This system works wonderfully accepted at the Wine Villa Cafe that opened a couple of months ago at Juhu Mumbai). But this did not work at our restaurant and we now take the order, insert the card ourselves. It is connected directed to the customer’s table and he/she settles the bill which is closed out when the customer is ready to pay.

This seems to be a case where despite the ambitious planning things have not worked well for the wine, restaurant or the consumer. Perhaps, wine sales are such a miniscule part of the total sales that the restaurant does not care but it’s clearly a case of opportunity lost for the restaurant and the consumer alike. Remember a wine glass not sold, is forever lost as a sale or consumption.

Subhash Arora

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