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Posted: Sunday, 09 February 2020 20:21

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Chennai Express: Sula Conquers Last Indian Bastion

Feb 09: If there was one positive news in the Indian wine industry undergoing an unprecedented and unexpected slowdown this year, it is Tamil Nadu opening the market by allowing sale of Indian wines through the elite stores of Tamil Nadu State Marketing Corporation (TASMAC) which has given an order of 100,000 bottles to the leading producer Sula Vineyards with an order to Fratelli Vineyards and Grover Zampa being also in the queue, says Subhash Arora

According to The Hindu, ‘Sula’s premium and sparkling range will be offered for the first time through Elite outlets and select TASMAC shops. The cash-cow of the state government has 83 Elite outlets, of which 31 are in Chennai.’

A senior official of TASMAC reportedly said, “Last year, we had invited brands registered outside Tamil Nadu and Sula was the first to register. Another brand, Fratelli has also shown interest and has submitted its application.” Vivek Chandramohan, CEO of Bangalore based pioneer winery Grover Zampa Vineyards says, ‘we have applied as well and should be able to enter TASMAC by next month.’

With the Top Three producers of India, present in this market, it will help expand the market and hopefully help wean the State away from hard liquor. Tamil Nadu is one of the highest consumer of alcohol in India and perhaps due to political propriety, did not allow Indian wines (part of Make in India concept promoted by PM Modi) to be sold in retail. Like in Karnataka (as also in countries like Norway, Sweden and Canada), sale of alcohol is controlled by monopoly.

Opening of the market in the State, where about 70-80% of the sales are expected to be in Chennai, there is a possibility of wine production base being set up here thus providing jobs to the farmers who can now dream of doubling their farm income as envisaged in the latest budget.

Sula Vineyards which claims to enjoy over 60% market share in the Indian wine market, excluding the sub Rs. 150 a bottle wines, is reportedly also evaluating options for a tie-up with a winery in Tamil Nadu. “Talks are also on with Cumbum Valley Winery. We are going to take a look at it,” says Rajeev Samant, founder-CEO who is naturally quite happy to finally enter the market- the last unconquered bastion of India; Sula is available in all the other States where there is no prohibition (being the most popular brand nationally, perhaps it is available unofficially there also).

One local wine aficionado Chinmaya Arjun Raja from Chennai is ecstatic enough to post the news item in the closed Facebook group of Indian Wine Academy with an international membership of over 12,000 wine lovers. Trained in France, he started a wine club about 15 years ago in consultation with the President of the Delhi Wine Club and conducts wine tasting sessions frequently.

Chinmaya says, ‘whenever I conducted wine events and training sessions in the last 15 years, I used to plan weeks in advance to source Indian/imported wines and sometimes even travelled to nearby cities just to procure the small quantity required.’ He is not hopeful of an early collaboration with the winery though. The winery has a lot of potential but a lot of work needs to be done.’

He is not perhaps aware that Sula bough Heritage winery in a similar state in Bangalore a couple of years ago and turned it around with the production of Kadu labels already in place. In any case, Tamil Nadu produces grapes and the quality and the varietal can always be worked out. Grover, SDU and KRSMA are also in the adjoining state of Kerala and a lot of potential is there for the progress in the farmers’ future, besides increase in tax revenues.

The industry has been in a bad state for most of the producers and importers. Barring Grover, most other wineries have seen a fall in their sales and the bottom line is worse with a severe competition in terms of incredible offers extracted by retailers being the norm of the day. After touching 1.3 million case mark, Sula has gradually been approaching a million-case mark (12 million bottles of 750 mL) this year. Of course part of their strategy is to cut down on the production of the cheaper ‘Port’ or ‘Nashik Port’ as it is known. Selling between Rs. 120-200 a bottle, it adds little to the bottom-line even with a peak turnover of 350,000 cases at one time for Sula.

Unfortunately, the immediate future will see similar slowing down problems with the current harvest being up to 30% for many wineries and importers. With a lot of excess capacity, it will be curious to see how they fill the capacity. Going back to cheap wines or adding Thompson grapes and Bangalore Purple mixing in their regular production or increasing the quantity of these low-end wines with the bottom of the barrel wines known as ‘Goan Part’ might be a strategy, at lease for the current year 2020-21.

India produces 3.5 million cases of Indian wines out of which about 1.5 million alone are known as Goan Port, Port or simply table wine-a vast majority are fortified wines made in Goa and Karnataka; Maharashtra does not allow mixing of alcohol into wine to increase the strength of alcohol. Over 400,000 cases are imported into India through duty-paid and duty free channels.

Consumers of Chennai would be happy that premium wines of Sula (and Fratelli and Grover when they get their orders) will be available to them soon.

Lets say Jai Ho (Cheers) to the government of Tamil Nadu and the people for joining the rest of the country in terms of wine availability.

Please send the comment JAI HO if you are from Tamil Nadu and are happy with the progressive decision.

Subhash Arora

 

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