Covid-19: Indian Wine Industry scrapes through Production but stares at No Sales

‘We were at the fag end of our harvest when the lockdown was announced but the Collectorate in Nashik was quick to allow us to complete the harvest, using a skeleton staff and maintaining social distance, continue with the crushing and fermentation,’ says Rajeev Samant, Founder-Director of Sula vineyards which seems to have been flirting around a million-case mark for the last 3 years and was hoping to maintain the same level this year which has seen many pitfalls during 2019-20 as detailed in our Article of 18 December, 2019 in delWine.

‘Of course it has brought the wine tourism to zero and the billing and dispatches have been practically non-existent,’ adds Rajeev who was in Nashik when delWine caught up with him. The current crisis has caused a drop of 5-10% in sales but the coming year is not going to be great either. Rajeev holds meetings with the staff on video chat twice a week to discuss future strategy. He feels this crisis has given Sula an opportunity to put their heads together and focus on making their business more efficient and tighter. He believes there might be changes in the way of doing business.  

How will they manage to pay the staff in Nashik and Heritage Winery in Bangalore? ‘We don’t see much of a problem since a lot of paid leaves would be adjusted and the annual shut down of 10 days would be carried out during the lockdown. Temporary line of credit from the banks at soft interest rates would be helpful too.' But he feels that the government should allow home deliveries in a limited way to get the supplies to the consumer-not an easy job when Maharashtra has the maximum cases of Covid-19 and the lockdown is likely to be extended for an unknown period.    

Ravi Gurnani, Director of York Winery echoes the sentiments. York was about to finish the Crush when the lockdown was announced. The Collector was kind enough to give the permission, theirs being an agricultural activity and they got permission to process the full lot of grapes. However, their crush has been lower this year and the target of 40,000 cases will elude them for yet another year, he says.

Grover Zampa has been luckier in this aspect and has managed to crush significantly higher crops, especially in its Bangalore plant. Vivek Chandramohan, CEO feels the revenues would be higher for 2019-20 by at least 10% though they were on course to achieve a 20% increase this year at 270,000 cases including 64,000 cases of ‘Port’. They have been hit by a cash flow problem that resulted in sales loss. Naturally, many of their new projects would be delayed; 2020-21 does not appear to be as rosy as planned. Ravi Viswanathan, Chairman has not even been able to visit India for the last couple of months. A further delay in the infusion of funds might affect the sales further this year.  Fratelli has refused to give the production and sales figures to delWine. Kapil Sekhri, Delhi-based Director of the winery which is the third largest winery after Sula and Grover, informs delWine that they have stopped sharing figures within the industry-one would need to approach the excise department or the balance sheet later. He claims privately that they are at no. 2 position, notwithstanding the fact that Grover gives figures for its vineyards in Bangalore and Nashik. Our sources point out to a drop of 15-20% sales during 2019-2020 at around 200,000 (unverified) cases for Fratelli.

Marketing constraints

All the producers and importers have suffered a loss of sales due to the lockdown. March is usually the busiest month because most buyers in off-trade and on-trade stock up because of the traditional break in the supply chain thanks to the new excise policies not being in place on time and no dispatches taking place in April. Stocks are available with retailers and hotels and restaurants but the consumption is nil because of the closure throughout India.

With the lockdown expected to be extended for at least 2 weeks on April 15 and the possibilities of further extensions, the fear is not only lack of sales but deterioration of quality of wines due to poor storage. It would be utopian to expect the wines to be stored under ideal temperature controlled conditions during period of no sales.

The financial strain on the importers and producers is evident with most complaining that the payments are stuck with the restaurants and retail outlets who are fighting their own fires.

For all practical purposes, 2020-21 will prove to be the years when a few might go bankrupt. An industry that has been struggling for a couple of decades finds it in a quagmire.

Imagine the plight of importers who have shipments in transit despite cancelling or postponing their shipments but material has to be cleared from the docks and stored properly in their warehouses, with shortage of labour! Arun Kumar, Director of Aspri Spirits and Wines, rues that the customs department is working but it is difficult to find labour to pick up the pallets from the docks.

Vintage 2020 Quality might suffer

To top it all, the quality of many of the Indian wines is also expected to suffer. Due to the unseasonable rains in October – November last year, a significant amount of crops was destroyed, resulting in a loss of 20-50%. In fact, Rajeev Samant had expressed apprehension in December 2019 that due to the impending shortage of wine grapes, some wineries would be forced to buy table grapes which are much lower priced but the wine quality is inferior. Coupled with the fact that the farmers could not sell these grapes just before lockdown, many were obliged to sell these to the wineries at throw away prices and unless they are used for the low-end wines only, the quality of even premier wines will be suspect. According to a Report, 18000 tons of grapes have been harvested in Maharashtra and this includes 7,000 tons of table grapes-indeed a matter of concern.

Fortunately, all the production is in the tanks and there has been hardly any loss of grapes.

Thieves and bootleggers thrive

In the meanwhile, thieves and bootleggers are doing a roaring business in black marketing. Kerala was the only State that allowed sale of wine and alcohol reportedly on a quota system, but the High Court reportedly struck that down. There are various reports of robbery and thefts from all parts of India, including Delhi, Mumbai, Hyderabad and Bangalore. delWine has been getting inquiries from all over India about whether wine was available anywhere and callers are disappointed that the lockdown makes it impossible to procure wines from anywhere. According to the grapevine bootleggers have been having a heyday. Many stores which have been robbed fear that before things come to normal their stores might be empty, thanks to the robberies.

The consensus in the industry is that, at least temporarily, home delivery ought to be allowed under essential food and services policy, even if online sales are not possible. The industry overseas is managing to survive thanks to online sales. Wine is nothing but a food product and with depleted stocks, the wine lovers are desperate. It is high time the government takes a pragmatic view. States are losing a major chunk of tax collection thanks to the current lockdown and when there is a relaxation, this point ought to be considered.  

There have also been some suggestions that the government could consider levying a Corona cess of Rs. 200-Rs. 500 a bottle to help garner some funds, needed badly for the cause of survival.

For an earlier related Article, please visit

Blog: Gloomy Outlook for the Indian Wine Industry

Subhash Arora

If you Like this article please click on the Like button