Dum dum, it's the sound of my gun 
Dum dum dum, honey what have you done? 
Dum dum dum, honey what have you done? 
Janie's got a gun, Janie's got a gun!.
       The article reminded me of the above lines in the 20-year  old popular song by Aerosmith: Janie’s got a gun. I can hear the sound of her gun  but when I meet her in Hong Kong, I want to tell Jeannie, ‘honey what have you  done?’ because with a Master of Wine under her belt, Jeannie sure has a gun!. 
      "So that means, inevitably, wine (interest) is  growing." The main hindrance to a potential boom in India's wine market,  given the rapid growth of a freer-spending middle class, is prohibitively high  alcohol taxes in key cities such as Delhi and Mumbai, though taxes are lower in  Delhi,’ reads the article from Reuter picked up by ET. 
      Whoa, whoa, whoa! Taxes are lower in Delhi!  Which Delhi are you talking about, honey?  ‘Cause the Delhi we live in, is choking and wine growth is dying a slow death  because the excise duties are so ridiculously high. I hate to admit this about my  home-town but the excise duty is a lot lower in Mumbai-and I mean a lot! No  sense in going through the details-my readers are already bored with my  continuous reporting and cribbing about it all the time. But all the facts are  there on the website; customs duty is the same everywhere in India, being a  central (federal) tax. 
      "Mumbai being the sort of business hub of India,  even though there's close to 300% duty, people still drink. People still enjoy  wine," Lee said according to the report. Who told you that, honey? After  going berserk in 2007 for a year or so, Maharashtra proved that they are more  with-it and reduced the duties substantially, especially on the super-premium  wines (read expensive!). This year they made hard liquor and beer more  expensive slightly but , may they live longer by drinking more wine, did not  touch wine, so it continues to enjoy the same taxes, though Delhi increased the  duties even more, especially on the medium and higher priced wines. 
      "So at the fine wine end of the spectrum, a lot of  the Bordeaux chateau owners are telling me they're doing quite well in India,  " she says. I would love to know which chateaux have told her- I am longing to  hear those sweet words from the Bordelaise for many years now. 
      "From an economic perspective, because (of) the  sheer number of people in India who are getting wealthier and who have  traveled, and who are not strictly practicing a certain religion and are much  more international, that proportion of the population in India is  growing," 
       Lee said , according to the article. I am always foxed  for a moment when asked this question overseas about religion by producers and  journalist alike when I meet them. It makes me wonder who is drinking away the  500 million cases of hard liquor and beer sold every year-against a total of  1.5 million cases of wine! There are people cutting across the political,  religious and social lines everywhere and adding to the list of drinkers- some  openly, others behind the curtain or a metallic container. 
      ‘Given its status as a market with a huge population rivaling  that of China, India's potential as a wine market looks just as exciting’, said  Lee.  This is a statement I cannot find  any fault with. But only potentially!!   In 20-50 years, we are surely capable of not only being a huge market  because of increasing population, abundance of youth and the capacity of  Indians to adapt to new aspirational products-be it mobile phones, cars or TVs  but unfortunately our (federal and state) governments have lumped alcohol with  wine and until the delineation happens ( happen it will-someday not so soon  though) we are a handicapped lot-almost straitjacketed. 
      ‘As soon the regulations are, if they are ever, relaxed,  then there really will be a boom.’ Her operative word, I believe is, ‘if they  are ever’. No denying that there will be a slower boom even with the existing  duties, if regulations are relaxed. But until the government can delineate wine  from alcohol, that is not going to happen. 
      ‘Cash-rich emerging Asian markets, especially India,  could see an explosion in wine consumption in the future - if their government  scraps import taxes altogether, the way Hong Kong did in 2008, maintains wine  expert Jeannie Cho Lee.’ 
       I agree and was  one of the first ones to have reported it on March 3 in delWine.’ But this  would be a mere fantasy even though I share with her whole heartedly. We are  not Hong Kong where they don’t produce wine. India has a growing domestic  industry which will compete with China one day but if the taxes were waived  totally today, the whole of the Indian wine industry would be wiped out overnight.  We certainly don’t want that to happen. 
      It is only with WTO intervention and the EU threatening to  sue the Indian government that customs duties were brought down but many states  which have supreme powers according to Sec 47 of the Constitution of India in  terms of taxation and the sales policy, immediately increased the excise duties  including Maharashtra, Delhi and Karnataka, which had over 75% of the total  wine market at that time in 2007. 
      There are talks of FTA going on between EU and India.  Duties are expected to come down to 50% on more expensive wines from the  present 150% if and when the treaty is signed. But how the excise duty issue  would be handled by the states would still be an irritant X-factor. 
      I don’t want to sound like ringing the death knells for  the Indian wine industry.  On the other  hand I maintain that the arrow has left the bow and the government cannot stop  the process of growing wine culture. There has been progressiveness shown by  the government and things have been moving ahead even though painfully slowly. 
              Unfortunately, the supply-chain pipe through which the  wine flows from the producer to the consumer is narrow and fragile. It would be  dangerous for a foreign producer to read into her lines and catch the next  flight to India hoping to reap immediate benefits– many of them already come  with high hopes, especially when their brands have certain clout in their  domestic market or overseas but go back frustrated. 
      Marketing in India needs time and patience. There will be  many stories of success in the coming decades. But the failures might well  outnumber them. We need to tread cautiously and be much more realistic than the  article suggests-even to an optimist like me. 
      Subhash Arora 
      ** With apologies  also to Debra Meiburg MW who is a Master of Wine of
        the same vintage as Jeannie, I believe. She is a US  citizen though living in Hong Kong for a couple of decades.      |