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WSA Awards 2014: Singapore Singe

Posted: Tuesday, 25 March 2014 14:06

WSA Awards 2014: Singapore Singe

Mar 25: One often hears about the famous cocktail Singapore Sling, but perhaps not Singapore Singe, a term coined by me during a recent trip to Singapore to judge at the WSA Wine Challenge 2014 where the sudden tax increase on wines last month saw Singapore singe and the imports brought to a standstill besides the continued problems of heat damage, writes Subhash Arora who feels their problems are similar but milder as compared to the Indian market

Click For Large View‘Please be careful of the heat damage to the wines you shall taste during the next 2 days. Wines getting cooked in heat can be a problem in Singapore. I suspect you might find about 10% wines bruised due to this defect alone’, said Annette Scarfe MW, the Singapore-based banker-turned wine educator and promoter who was the chairperson of the jury consisting of tasters who were either Asians or permanent residents of Asia. She was explaining the possibly faults to look out for while judging.

‘Singapore had been expecting import duty reduction after Hong Kong announced a waiver in 2008. When the government suddenly announced no movement of wine and alcohol on February 21, we assumed the import duties on wine were being reduced from the current S$70 a liter of pure alcohol. To our shock and dismay, they were increased to S$88, an increase of 25%!’ said Roderick Proniewski. He is a French Asia- Pacific wine specialist, settled in Singapore, who also organises the biennial WSA Wine Challenge, the international wine competition on behalf of Singapore Exhibition Services Pvt Ltd. which hosts Asia’s most renowned food and hospitality Show FHA Asia, held biennially. Roderick should know about the administrative pains caused by a sudden change in taxes-his Malaysian wife runs a successful import business and has been busy for a month, trying to get her business back on the rails.

To those of us in India, this would be a surprise as the market in India is under a siege for months at a time. Increase in taxation is a common occurrence by some State or the other. If it is not tax increase, it is the renewal of excise license en masse because suddenly one day the department wakes up in some State and realizes it has been lax. Or how about disallowing stock transfers till one follows the new system of online ordering in the middle of a busy season –if their software has a glitch, that’s not their concern. And why not enforce the FSSAI (food and safety) regulations even if the government is under-staffed and ready to throw the book at you without caring that many aspects are irrational and impractical. So what if the container-loads of wine and food are spoilt or the liquor importers are twiddling their thumbs trying to negotiate, they are not accountable!

But it is only politically correct to sympathize with my friends in Singapore because it is rather developed economy and one does not expect sudden speed breakers. As an example, a hotel has placed an order which is under execution or a restaurant which has just released the new price list and catalogue. One cannot supply until the new prices come into play and the price-list approved by the government (the system is much simpler than in India, with only one import tax plus 7% GST as compared to 20% VAT in India). But since every label has different alcohol content by volume, the duty is calculated on each label individually. If it is a 13% alcohol, the tax now would be 88*.75*.13=   S$8.58 (appx. Rs. 415 a bottle).This amount is fixed no matter if it is a cheap plonk costing US $ 2 or a Bordeaux Classified Growth costing US $2000.Obviously, the more expensive bottles are not affected much by the taxes which in any case are minimal for the expensive bottles but the market is still much bigger for low ended wines which are affected significantly by the increase.

‘People in Singapore are drinking more wine than they were about 5-7 years ago but they don’t know what to order and don’t care to know or learn about wine,’  another Frenchman who has been in the import business for several years and has been helping Roderick in the wine service during the competition, tells me. Echoing the sentiments expressed by Annette, he says ‘people like to stick to a cheaper, even same brand at times and are neither willing to learn nor pay for learning. The hoteliers are no different. The first question they ask when you meet them is what’s there for me in it? They want to buy Champagne but are not willing to pay for it.’ Shades of India, I wonder.

But surely people understand the concept of heat damage as the wine market has been evolving much longer in Singapore than in India, I ask. ‘It’s getting better but the change is very slow,’ says a Singaporean journalist. Although the customs department clears the consignment within 24 hours but delays do occur and the heat does cause damage to the wines. Most distributors now appreciate the temperature-controlled environment necessary for wine but there are still examples of the guy distributing wine locally, starting in the morning and ending the round in the evening- the wine bottles being in the vehicle the whole day, and delays at customs notwithstanding. This could be perhaps one of the reasons that some of the wines imported into Singapore for Robert Parker tasting last month were f found bruised.

The wine import being free like in India, the number of importers is astronomically high for the small domestic market. There are apparently about 1000 licenses issued –at a nominal annual charge. About 600 importers are active. 600!! We have less than 100 importers Pan India; only 30 or so are really active.

If we feel the restaurant prices are very high in India, their counterparts generally keep a mark- up of 200-400% in the singed Singapore. ‘One restaurant I know, charges for a 150mL glass the price he pays for a bottle,’ says the French consultant. No wonder wine is an expensive commodity even in Singapore. And this when there are no cost loadings to worry about because of the multi-step corruption one faces in India

Many people had even speculated that Singapore was planning to abolish the duties on wines. But Hong Kong took the initiative and waived the duties overnight in 2008. Unarguably, Singapore is too proud a nation to follow a country like Hong Kong and what I observed in Singapore last week in their wine market, could be termed -Singapore Singe.

Subhash Arora



Subhash Arora Says:

I agree with you, Remie. Singapore missed out a golden opportunity to be the Asian hub. And as you said, the Civil officers can be prejudiced and ill-informed and many people suffer due to their myopic outlook or ignorance. I know it well-living in India. Subhash

Posted @ March 28, 2014 11:45


Remie Says:

Oh, a topic so close to my heart. The "hefty" uptick in excise duty really got my fellow importers in a pickle. As you mentioned, the difference is largely felt at the high volume, lower priced/everyday wines. This is also where turnover figures are generated to impress principals & I suspect where commissions are paid out to sales employees are generated. I strongly suspect the underlying reason is the encroaching presence of teetotalling evengelist Christians among the policymakers in Government. Besides the lack of business knowledge common among civil employees, everywhere. The former Treasury Secretary of Hong Kong, an avid wine consumer, was instrumental in the zero liquor tax there. Besides the business benefits from a hinterland with vast potential for wine. He listened to his business advisors and are reaping the benefits. The sad thing is that Singapore could happily take on the role for the whole South-East Asian region. Pent-up frustrations from liquor-restrictive regional regimes could be released within Singapore for the benefit of its liquor industry players/tourism. Alas, it was not to be. Thus, it appears that "Wine & Sprits Asia", this year, will be a small fraction of its full potential. WSA used to occupy a full Hall & more at FHA is evidence of this.

Posted @ March 28, 2014 11:15


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