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Delhi Wine Club
 

Posted: Friday, October 23 2009. 12:00

Special feature: Chile Hopes for a Silver in three Years

Chile, with an export of US$11.3 m in 2008 is currently the fourth largest producer in India but aims to reach the number two slot in three years, according to a report on the wine industry report compiled by ProChile and released first to delWine which is publishing it as it is, without any edit,comments or observations.

1. - Introduction

The imports of bottled wine in India , with the country of origin were USD 11.3 million in 2008, with an annual growth of 34% between 2004 and 2007.

Among the factors that have promoted the consumption of the wine it is necessary to emphasize the change in the customs, habits and life style of the Indian consumers (specially of youngsters and women) due to the economic boom which increased the purchasing power of a major segmentation of the population, The influence of the cable TV, Internet, change in attitude of authorities for encouraging the wine consumption instead of hard liquors, the emergence of a wide variety of wines of acceptable quality both national and imported, the boom in tourism, the frequent foreign trips of the nationals and also due to the social status and health awareness that generates wine.

Chile , in bottled wine has achieved a progressive position in the Indian market in the last four years. It is demonstrated by the fact that in 2004, it was the sixth provider with a participation of 3.94% in the market and in 2008 it has transformed in the fourth provider with market share of 4.9 %.  As showed in Table No. 3.

It is necessary to underline that with Chilean exports of USD 566,200, Chile experienced a growth of 72.8 % in 2007 whereas the French exports fell down by 34.6%.

With regard to 2008 average annual prices of wine, United Kingdom stands out with USD 8.81/ liter, followed by France with USD 8.69/ litre, Italy with USD 6.17/ litre, Australia with USD 4.21 / litre, Chile with USD 3.26 / litre y USA with USD 3.21. This reflects the Chilean tendency of placing itself in the upper intermediate segment with wines of prestige and international quality.

This growth of Chilean wine in Indian market, in full period of financial crisis, basically attributes to the slogan Value for Money providing Chilean wine of excellent quality international price and to the promotional activities conducted by the Mission in India .

At present there exists an active presence of more than 27 Chilean Vineyards out of which 12 brands have consistent presence. This number is much more than 12 vineyards existing only four years ago in 2004.

The recently inaugurated Commercial office of Prochile among its other goals for the next three years will aim to consolidate Chile as second largest wine exporter to Indian market with a participation of around 18% and portfolio of at least 60 regular brands in the market.

The Chilean strategy will be to promote quality wines oriented to the intermediate upper segment, given the fact that we would not like to compete with the local wines, wines from countries without wine tradition and the bulk wines bottled locally.

In order to make a difference in the market, we must promote Chilean wine in the following communication context with slogans such as:

  1. Chile exports its best wine production, not its surplus.
  2. The consumption of Chilean wine grants the best Value for Money.
  3. Carmenere- an exclusive variety of Chilean wines.
  4. Chilean Wines, the only pure variety, not contaminated by pests.
  5. The promotion and consumption HORECA of what we exclusively call – The Chilean Glamour Wine (375 ml Bottle).

2. - Description of Market Size

The size of the wine market in India is estimated by an annual consumption of 1.395.400 boxes, approximately 12.6 million litres being projected for 2011, and a consumption of 17 million litres equivalent to approximately 1,900,000 of boxes. The detailed description follows:

2.1. - Local Production:

With respect to the local production, at present India possess 4 principal producers of wines. They are Indage, Sula, Vinsura and Grover. There exist also another 20 secondary producers. The Indian government has strained for encouraging this product, motivating the creation of parks for wine production in Maharashtra . Also it has implemented internal tax reduction policies for the local production. At present India produces next to 10 million bottles of wine, equivalent to 12 million bottles (1,110,000 boxes) annually. Out of these it exports 191,600 boxes (128,000 boxes of bottled wine by country of origin, 5,600 boxes of sparkling wine and 530,000 litres equivalent to 58,000 boxes of bulk wine).

India imports approximately 2,530,000 litres, some of 3,373,000 wine bottles equivalent to 282,000 boxes ( 262,000 boxes of bottled wine by origin and 20,000 boxes of sparkling wine) and around 1,750,000 litres in bulk annually( Equivalent to 195,000 boxes).

2.2. - Evolution of Wine Imports in India

In 2008, India ’s wine import reached up to 20 millions USD, as it is seen in Table no. 3, with a fall of 13.9% as compared to 2007. This is due to international crisis.

In the market share, bottled wine leads with imports of USD 11.3 millions, with an annual downfall of 14.7 % as compared to 2007 in which it was USD 13.2 millions. A spectacular annual increase of 34 % is seen in 2004 - 2007.

With regard to sparkling wine the annual market share has increased to 74% between 2004/2007, totalling to USD 5.6 million in 2008. As far as bulk wine is concerned the imports has increased to 48% in 2004/2007, totalling to USD 1.7 million in 2008.

The bottled wine participation is 60% of the whole wine imports. This is due to the consumer’s awareness on quality wines. This reflects that local consumers have more confidence in quality of wines bottled in country of origin than bottled locally.

France leads among the principal providers of wine in general with a participation of 41.6% followed by Australia with 17%, Italy with 9.1%, United Kingdom with 4 %, South Africa with 3.4%, Chile is the sixth provider with market participation of 3% and USA with 2.6%. As showed in table no. 2.

Table no 1. - Evolution of wine imports in India .

(Period 2004/2008, Values in USD thousand)

Code

Item

2004

2005

2006

2007

2008

220421

Bottled Wine

5,470.5

8,100.5

9,135.6

13,169.7

11,224.6

220410

Sparkling Wine

1,225.0

2,250.0

5,500.0

6,240.5

5,643.9

220429

Bulk Wine

635.0

789.2

846.6

2,144.0

1,669.6

 

TOTAL

7,330.5

11,139.7

15,482.2

21,554.2

18,538.1

 

Annual % Change - General

 

52.0

39.0

39.2

-13.9

 

Annual  % Change - Bottled

 

48.1

12.8

44.1

-14.7

Source; Prochile Commercial Office in New Delhi, in base value FOB exports of the supplier countries, based on the calendar year January to December for each year.

Note; Indian Statistics are based on the financial year from April of the base year till March of next year.

2.2.1. - Evolution of Indian wine market by country of origin.

In 2008, the imports of bottled wine in India was USD 11,3 millions in front of USD 13.2 millions in 2007. This reflects a downfall of 14.7% but a spectacular half yearly growth of 34 % between 2004/2007.

France leads among the principal wine producing and exporting countries of 2008, with a participation 28,9 % in the market, followed by Australia with 24.5 %, Italy with 12 %, Chile in the fourth place with participation of 4.9 % and USA with United Kingdom with a participation of 4.2 % respectively.

With respect to average annual prices 2008, United Kingdom leads with USD 8.81 / litre followed by France with USD 8.69 / litre, Italy - USD 6.17 / litre, Australia - USD 4.21 / litre, Chile - USD 3.26 / litre and USA - USD 3.21 / litre, reflecting the tendency of Chile of placing itself in upper intermediate segment with prestige and international quality wines.

Table no 2. – Wine import of HS: 2204 in India

(Period 2004/2008, Values in USD thousand)

Country of Origin

2004

2005

2006

2007

2008

USD (in Thousands)

USD (in Thousands)

USD (in Thousands)

Litres

USD (in Thousands)

Litres

USD (in Thousands)

TOTAL

7,330.5

11,139.7

15,482.2

4,563,210

21,554.2

3,779,477

18,538.1

FRANCE

3,257.4

6,046.7

8,143.8

1,125,025

10,984.7

905,847

8,130.0

AUSTRALIA

859.9

1,360.8

1,784.1

1,334,871

3,007.8

1,054,000

3,320.4

ITALIA

879.1

1,051.8

1,842.3

336,294

2,254.3

276,999

1,785.9

SINGAPUR

105.1

133.6

148.3

25,665

165.2

75,450

1,117.5

UNITED KINGDOM

583.8

543.1

1,020.6

45,394

686.6

69,944

779.4

SOUTH AFRICA

52.1

129.2

149.0

516,000

760.2

686,389

669.0

CHILE

316.9

336.8

308.4

175,910

357.3

180,226

586.4

USA

408.5

370.4

791.7

558,445

1,578.9

155,636

500.5

SPAIN

90.7

129.3

121.5

105,014

255.4

108,645

459.7

GERMANY

193.2

413.1

388.2

117,699

471.4

77,341

435.7

NEW ZEALAND

209.4

139.1

87.8

25,277

278.3

20,407

243.1

USA

62.0

80.0

176.0

65,000

133.0

62,000

130.0

ARGENTINA

60.3

60.6

248.4

56,547

241.7

39,026

124.0

HOLLAND

63.0

49.7

53.0

1,518

45.5

3,542

101.3

PORTUGAL

132.6

83.2

96.5

68,784

144.2

59,924

96.3

AUSTRIA

0.0

1.5

0.0

1,093

11.2

2,475

15.8

BELGICA

0.0

0.0

0.0

16

0.1

1,159

12.9

MALASIA

9.2

89.3

96.1

706

15.6

393

7.3

CANADA

0.0

0.0

0.0

 

7.0

 

5.1

BULGARIA

0.0

0.0

0.0

3,952

8.7

74

0.2

Source; Prochile Commercial Office in New Delhi , in base value FOB exports of the supplier countries

Table no. 3 – Imports of wines in India by country of origin, HS: 220421

(Period 2004/2008, values in USD thousand)

Country of Origin

2004

2005

2006

2007

2008

USD (in Thousands)

USD (in Thousands)

USD (in Thousands)

Litres

USD (in Thousands)

Litres

USD (in Thousands)

TOTAL

5,470.5

8,100.5

9,135.6

2,354,452

13,169.7

2,064,338

11,224.6

FRANCE

2,204.3

3,943.4

3,432.3

559,682

5,155.3

387,727

3,369.0

AUSTRALIA

791.6

1,270.9

1,446.1

454,959

1,946.4

680,313

2,863.0

ITALY

821.3

925.8

1,635.5

289,455

1,879.9

227,710

1,406.0

CHILE

222.0

307.0

308.1

103,910

327.6

173,701

566.2

UNITED KINGDOM

215.5

245.7

317.2

30,350

393.2

56,243

495.7

USA

350.7

289.3

727.8

550,903

1,564.6

151,226

485.5

SINGAPUR

101.8

131.9

142.1

23,950

143.9

44,920

484.2

SPAIN

67.6

81.2

93.9

85,399

211.6

99,035

357.3

SOUTH AFRICA

47.5

112.9

118.3

70,878

302.0

130,023

282.7

GERMANY

92.9

254.8

215.3

59,863

283.1

46,916

264.1

NEW ZEALAND

209.4

135.8

87.8

24,899

273.9

20,151

238.9

ARGENTINA

60.3

60.6

248.4

35,000

241.7

14,000

124.0

HOLLAND

54.8

40.7

16.1

1,509

45.2

3,154

89.1

PORTUGAL

114.4

51.0

76.5

38,760

125.6

19,002

57.4

AUSTRIA

0.0

1.5

0.0

1,048

10.9

2,475

15.8

BELGICA

0.0

0.0

0.0

16

0.1

934

9.2

MALASIA

9.1

89.2

91.1

560

6.5

369

5.4

Source; Prochile Commercial Office in New Delhi , in base value FOB exports of the supplier countries

Chilean participation in the wine exports with country of origin

In the past four years Chile has achieved a major position in the Indian market. This is demonstrated by the fact that in 2004, Chile was sixth provider of bottled wine with a participation of 3.94 % in the market and in 2008 it has transformed into fourth provider with 4.9 % of the market share. As mentioned in Table No. 3.

One must emphasize that Chile experienced a growth of 72.8 % in 2008 as compared to 2007. Chilean exports reached to USD 566.200, whereas the French exports fell down by 34. 6 %.

The growth of the Chilean wine in Indian market, in full period of financial crisis, is basically due to the slogan Value for Money, given the excellent quality international price, and to promotional activities realized by Mission in India .

2.2.2. - Evolution of sparkling wine in Indian market.

The imports of sparkling wine, has increased to 74 % annually in the period of 2004/2007, totalling to USD 5.6 millions in 2008, France being the principal exporter with a participation 65.5 % in market, followed by Singapore, United Kingdom and Italy with 10.2 %, 4.6 % and 3.6 % respectively. As shown in Table No. 4.

Chile has begun its exports with incipient amount of USD 9.000.

As far as average annual prices in 2008, France was still on the top with USD 24.7 / litre followed by United Kingdom with USD 21.0 / litre, and Italy with USD 8.2 / litre.

Table no. 4. Imports of Sparking Wine in India , HS: 220410

(Period 2004/2008, Values in USD thousands)

Country of Origin

2004

2005

2006

2007

2008

USD (in Thousands)

USD (in Thousands)

USD (in Thousands)

Litres

USD (in Thousands)

Litres

USD (in Thousands)

TOTAL

1,225.0

2,250.0

5,500.0

180,844

6,240.5

137,661

5,643.9

FRANCE

676.3

1,629.6

4,255.3

214, 803

5,153.5

164, 787

4,063.4

SINGAPUR

0.8

1.7

6.2

1,712

19.9

30,530

633.3

UNITED KINGDOM

368.3

275.2

700.0

15,044

293.5

13,477

282.5

ITALY

11.7

56.6

40.5

17,395

143.8

27,250

223.1

GERMANY

100.3

158.3

165.8

32,933

149.9

30,425

171.5

SPAIN

23.1

48.0

27.6

7,065

24.0

9,610

102.4

AUSTRALIA

18.3

21.6

180.2

94,600

351.6

7,949

49.1

SOUTH AFRICA

3.6

5.0

11.8

5,924

16.0

7,967

16.3

USA

12.4

9.9

30.0

3,438

11.2

4,410

15.0

HOLLAND

8.2

9.0

36.9

9

0.4

388

12.2

CHILE

0.2

0.0

0.0

0

0.0

2,475

9.0

PORTUGAL

0.0

0.0

0.1

0

0.0

1,312

4.3

NEW ZEALAND

0.0

0.0

0.0

378

4.3

256

4.2

MALASIA

0.0

0.1

5.0

146

9.2

24

2.0

BULGARIA

0.0

0.0

0.0

364

1.0

0

0.0

AUSTRIA

0.0

0.0

0.0

45

0.4

0

0.0

Belguim

 

 

 

0

0

225

3.7

Source; Prochile Commercial Office in New Delhi , in base value FOB exports of the supplier countries

2.2.3. - Evolution of Bulk wine market in India .

With respect to Bulk wine imports, the imports has increased annually to 48% in 2004-2007, with the value of USD 1,7 millions in 2008.

France leads among the principal providers with a 41% of the market share, followed by Australia with 24 %, South Africa with 21.7 % , Italy, Portugal and Chile with a participation of 7.8%,  2% y 0.7% respectively, As shown in Table No 5.

As far as average annual prices in 2008 are concerned, France stands out with USD 1.97/litre and Australia with USD 1.12/litre.

This is the segment where Chile prefers not to promote itself for not being associated with the inferior quality wine.

Table no. 5. Imports of Bulk Wine in India HS: 220429

(Period 2004/2008, Values in USD thousands)

Country of Origin

2004

2005

2006

2007

2008 

USD (in Thousands)

USD (in Thousands)

USD (in Thousands)

Litres

USD (in Thousands)

Litres

USD (in Thousands)

TOTAL

635.0

789.2

846.6

1,758,512

2,144.0

1,342,388

1,669.6

FRANCE

376.8

473.7

456.3

350,450

674.3

353,333

697.6

AUSTRALIA

50.0

68.3

154.1

785,313

709.9

365,692

408.3

SOUTH AFRICA

1.0

11.2

18.9

439,189

442.2

548,345

369.7

ITALY

40.3

69.4

145.4

21,821

184.1

18,067

131.7

PORTUGAL

18.2

32.2

19.0

30,024

18.6

39,610

34.5

CHILE

94.7

29.8

0.0

72,000

29.8

4,050

11.3

SPAIN

0.0

0.0

0.0

12,550

19.8

o

0.0

USA

45.4

71.3

34.0

4,104

3.1

0

0.0

GERMANY

0.0

0.0

7.1

24,903

38.4

0

0.0

UNITED KINGDOM

0.0

22.2

3.4

0

0.0

0

0.0

SINGAPUR

1.7

0.0

0.0

3

1.4

0

0.0

NEW ZEALAND

0.0

3.3

0.0

0

0.0

0

0.0

BULGARIA

0.0

0.0

0.0

744

1.2

0

0.0

Source: Prochile Comercial office in New Delhi , in base value FOB of Supplier countries exports.

3. - Evolution of Chilean wine exports to Indian market by companies – Vineyards.

The exports by Chilean wine yards to the Indian market have increased significantly in last four years. This can be seen in Table No. 6.

At present there exists an active presence of more than 27 Chilean Vineyards out of which 12 brands have consistent presence. This number is much more than 12 vineyards existing only four years ago in 2004.

The vineyards that have a more active and regular presence in the market are Concha y Toro with 12.1 % in 2008, followed by Tarapaca with 10.2 %, Montes with 8.5 %, Casa Lapostolle with 8.2 %, Miguel Torres with 8 %, Anakena with 5.1 %, Rothschild with 2.5 %, Valdivieso with 1.9 % and Saint Ema with 0.9 % of participation of the market as shown in detail in Table no. 6.

Table no. 6. - Evolution of wine exports by Chilean vineyards

(Period 2004/2008, Values in USD thousands)

Viña

Monto 2003

Monto 2004

Monto 2005

Monto 2006

Monto 2007

Monto 2008

2008%

Viña Concha y Toro S.A.

 

28.178

35.385

44.741

25.862

60.034

12,10

Viña Tarapacá Ex-Zavala S.A.

28.720

59.810

86.722

85.924

66.935

50.400

10,15

Viña Montes S.A.

20.044

29.660

6.988

29.457

48.140

42.130

8,49

Casa Lapostolle S.A.

13.220

41.165

 

38.688

22.820

40.610

8,18

Sociedad Vinícola Miguel Torre

 

 

13.200

14.350

31.487

39.728

8,00

Viña de Martino - Jugos Del Ma

 

 

 

 

 

25.926

5,22

Viña Errázuriz S.A.

 

 

16.126

 

 

25.920

5,22

Viña Anakena (Agrícola y Fores

 

 

 

5.120

12.102

25.415

5,12

Viña Undurraga S.A./ Distribui

 

 

 

 

 

24.728

4,98

Dewinko S.A.

 

 

 

 

 

20.620

4,15

Viña Santa Mónica Ltda.

 

 

 

 

 

20.000

4,03

Viñedos Emiliana S.A.

 

 

 

10.638

16.975

20.000

4,03

Barón Philippe de Rothschild M

 

 

23.934

13.640

3.183

12.416

2,50

Viña San Pedro Tarapacá S.A.

 

 

 

 

 

12.300

2,48

Viñedos Torreón de Paredes S.A

 

 

 

 

 

11.559

2,33

Viña El Aromo

 

 

 

 

7.740

11.100

2,24

Viña Caliterra S.A.

4.550

 

 

 

3.500

10.500

2,12

Viña Seña S.A.

 

 

 

 

7.500

10.500

2,12

Odfjell Vineyards S.A.

 

 

 

 

 

9.593

1,93

Viña Valdivieso S.A.

6.480

9.140

85.779

57.715

3.040

9.480

1,91

Vinos Santa Ema S.A. / Viña Sa

1.560

 

2.548

5.760

2.666

4.406

0,89

Antinori Matte S.A.

 

 

 

 

 

4.358

0,88

Viña Luis Felipe Edwards Ltda.

 

 

7.033

 

 

1.350

0,27

Sociedad Comercializadora de V

 

 

 

 

 

1.221

0,25

Viña Morandé S.A.

14.508

16.800

 

 

 

1.128

0,23

Agrícola Santa Cristina Ltda.

 

 

 

 

 

748

0,15

Bodegas y Viñedos de Aguirre S

 

 

 

 

5.413

170

0,03

Viña Valles de Chile S.A.

 

 

3.350

2.400

 

 

 

Viña Los Robles

 

29.760

29.748

 

 

 

 

Viña Cremaschi Furlotti

 

3.331

14.825

 

 

 

 

Viña Vistamar Ltda.

 

 

3.750

 

 

 

 

Laroche Chile S.A.

 

44.485

 

 

25.064

 

 

Viña Santa Carolina S.A.

 

 

 

 

7.380

 

 

J. Bouchon y Cía. Ltda.

 

 

2.752

 

5.616

 

 

Viña San Nicolás Wines S.A.

 

 

 

 

29.760

 

 

Agricola e Inmobiliaria Cantal

 

 

1.470

 

 

 

 

Terramater S.A.

5.492

6.409

3.145

 

 

 

 

Bodegas y Viñedos Dussaillant

23.040

23.040

 

 

 

 

 

Viña La Rosa S.A.

 

15.980

 

 

 

 

 

Nevada Export S.A.

9.120

9.120

 

 

 

 

 

Viña MontGras S.A. - Agrícola

7.680

 

 

 

 

 

 

Sur Andino S.A.

4.830

 

 

 

 

 

 

Sociedad An Viña Santa Rita

3.279

 

 

 

 

 

 

 Total

142.522

316.878

336.754

308.431

357.282

586.400

100,00

Source: Prochile commercial office in New Delhi

4.- RELEVANT INFORMATION ABOUT THE MARKET

4.1.- Characteristics of the Indian Market.

India has converted into one of the major economies with the fastest economic growth globally during the last few years. What should be noted is the pillars on which it relies for growth, thereby enhancing a progressive development in the service sectors (India has consolidated its position as a reference point for Information Technology, for Services regarding Business Development and support and telecommunications), with the industrial growth in the automobile, pharmaceutical and textile sectors. Subsequently, India has developed an emerging middle class that characterizes the commercial opportunities of the New India.

With over one billion inhabitants and a population with sufficient purchasing power to buy consumer goods from foreign countries significantly smaller, but equally attractive, the number of High-Income families is estimated at over 20 million and about 300 million citizens who comprise the middle class.

4.2 .- Duties on wine.

The Duties on agricultural products are between 30 and 40%, with frequent anti-dumping proceedings. The duties on non-agricultural products have fallen slowly but steadily at an annual rate of 2.5%.

The high tax imposed by the Indian government on foreign wines, makes their price to rise excessively.

The wines pay three customs taxes: The "basic duty", which is uniform for all the wines, of 150% on the CIF value, an "additional tax" of 4% on the CIF value and other "special tax" 4% on the basic tariff, ie 6% on the CIF value and total tax is 160% on the CIF value.

4.3 .- Technical Product Regulations.  Labeling

The rules governing the marketing of alcohol differ in the 28 states and 7 Union territories of India . It is precisely for this reason that to enter the Indian market, it is especially necessary to study carefully the rules in the target states, as well as selecting a competent distributor importer or agent, who owns a marketing network in the market aggressively.

Indian regulations on wine is determined by the Bureau of Indian Standards (www.bis.org.in). This organization publishes documents for each type of alcohol, specifying the current rules in details and standards of their manufacturing process. As an indication, it should be noted that to date no imported alcohol has been the subject of control, reflecting that the Indian authorities believe that the control rules in the countries of origin, are sufficient to protect the Indian consumer.

The labeling of the bottles may be the same as it is in origin, maintaining the same information and even the language, but must include additional labeling containing detailed information of the importer, mainly:

-The content in units

-The name of the product

-The name, full address of the manufacturer and production site

-The name and address of the importer

-The place of packaging or bottling in the event that the product
  be bottled in India .

-The country of origin

-The level of alcohol

-The MRP or consumer Maximum Retail Price

4.4 .- Distribution Channel

IMPORTERS

DISTRIBUTOR                                      EMBASSIES                             HOTELs

(In Different States)

HOTELS           FINAL CONSUMERS

The wine distribution system also varies between states. Thus, states like Karnataka give more facilities for distribution, and have a highly developed network of supermarkets where you can find wine along with other consumer goods. This facility also exists in other states like Maharashtra (Mumbai) and Goa .

However, this contrasts with the situation in Delhi , where the wine is distributed mainly in the Wine Shops governed by the local government. Moreover, the wine that is usually found in these shops are locally produced and are of low quality, there is very little presence of imported wines in these shops. The Indian consumer usually finds wines, national and / or imported in the following locations:

-Luxury Hotels : In states like Delhi , five-star hotels represent the main hub for wine consumption. So the restaurants located in these hotels offer a variety of high quality wines.

These hotels encourage the sales of international wines, but also showcase a minimum presence of national wines. They usually highlight French wines, which in some cases constitutes at least 50% of the total wine list.

The five-star hotels have a great advantage over the point of sale / consumption of wines in India ; they fall in a special tax bracket, due to which they are exempt from paying the national tariff (Basic duty) imposed on the wine as an incentive to capitalize on the Tourist movement.

-Distribution : Comparable to the western distribution, we find large retail chains like Reliance in the state of Maharashtra , with a highly developed commercial network. This development in the commercialization of wine, is mainly visible in the states of Maharashtra and Karnataka.

-Retail Trade : Small boutique stores focused on selling top quality wines as compared to the most popular supermarkets. The type of customer who visits these stores usually belongs to a medium-high income group , and is generally more wine literate. In Delhi there are a small number of such establishments approximately ten in number, while in states like Maharastra, due to the strong distribution network, such stores have successfully proliferated to target a more specialized and focused clientele.

-Small hotels, restaurants and pubs : Visited by high-income consumers, they offer a variety of wines the presence of foreign tourists in these establishments is also ever increasing. However, They have to cope with the payment heft amounts for the procurement of license for the sale of Alcohol and wines. Therefore, only very fancy restaurants carry a wine list.

In India advertising and strategic campaigns related to the promotion of wine and alcoholic products is prohibited, as such international liquor brands have included mineral water in their portfolios whose consumption of which can be promoted on Television-thus creating awareness for the liquor brand, On the other hand, the field of wines resorts to competitive activities such as Wine Tastings, Wine Dinners, Wine Pairing Events involving local cuisine, inviting journalists and importers of wine and participation in specialized trade fairs, to promote their line of products.

4.5- Consumption Habits and Demand Analysis.

-Wine is mainly consumed in urban areas, which accounts for 80% of demand, especially in the major metropolises of the country: Mumbai (39%), Delhi (23%), Bangalore (9%) and Goa (9 %), which are primarily the main centers of international tourism, the balance 20% of consumption constitute the remaining states.

-Another symptom of the concentration of consumption in urban areas is the emergence of "wine clubs" in these cities.

-Products such as wine encounter more obstacles than other “consumer goods of western origin” at the time of entering the Indian market:

-The price is perhaps the main problem. With an average per capita GDP close to $ 660 p.a. , very few can afford to buy a bottle of wine which costs around $ 30 minimum in a hotel.

-The Economic Growth of the country, in recent years India has registered a strong economic growth that has allowed the emergence of a wealthy minority class with strong purchasing power and growing trend of purchasing traditional western consumer goods, who can afford the purchase of luxury goods, like wine.

-Opening to the world, India is becoming a focus of attraction for the whole world. In major Indian cities it is becoming increasingly common to find high quality international products. Thus there is a gradual increase in shops that sell international products coexisting in the same space with the traditional convenience stores.

-Emergence of associations of wine, wine lovers in general, persons belonging in one way or another to the wine industry have created a significant number of associations that seek to educate people of the properties of wine, spread greater knowledge about quality wines and the best combination of Indian dishes with different wine varieties such as Cabernet Sauvignon, Merlot, Carmenere, Shiraz, Sauvignon Blanc, Chardonnay.

Thus, it is feasible to find these wine lovers, grouped into "wine clubs" in the main centers of consumption in the country: Delhi , Mumbai, Bangalore , Chennai, Chandigarh and Hyderebad.

5 .- CONCLUSIONS AND RECOMMENDATIONS

The demand of the Indian consumer is determined primarily by the purchasing power of their people and religious traditions, but its consumption is being stimulated by access to Internet, Western films, more and more frequent trips outside the emerging middle class, and the boom in tourism. The potential consumer segment is represented by almost 250 million consumers with purchasing power in the ABC group, those who enjoy an income that allows them to access delicatessens such as wine, salmon and fruits of a Mediterranean climate.

According to McKinsey study, there is a top consumer class with annual income of USD 10,500 which will grow from 3.6 million households in 2005 to 42.6 million households by 2025, which are potential consumers of products such as wine, as well as the second group of consumers consisting of 95 million families.

Indian society is aware of economic changes taking place in the country, which simultaneously is creating a social change. The assimilation of the tastes and habits of western consumption is a phenomenon that extends across the emerging economies, especially in countries like China and India, in this context products such as wine are seend by the Indian consumer as products that give them a esteemed value, they are seen as products of quality that promote good health and is looked upon as a status symbol.


Access to the Indian market requires patience and a process of adaptation and assimilation of the Indian culture. It is difficult to achieve a short term result in this country where personal relationships are important and although the fact of being an English speaking population facilitates communication, dependence of such diverse cultures, requires an understanding of the business culture in India to work and achieve results in this market.

Therefore, it is recommended to enter the market through a local partner, preferably with experience in dealing commercially and professionally with western countries, in the event of an eventual business agreement, should possess the knowledge of the administrative and bureaucratic processes of the country and the contacts available, can be the deciding factor to facilitate the company to enter the commercial/industrial market of the country.

Perseverance and presence are two equally important concepts. It is necessary to maintain that personal touch that differentiates the company from its competitors qualitatively. The Indian entrepreneur in general, aims to establish a long term industrial relationship, whereby the initial contact face to face, is key to the success of its business.

With regard to building strategies for Chilean wine, although BIO (Bottles In Origin) wines have achieved a certain position in the Indian market in the last four years as evidenced by the fact that in 2004 we were the sixth largest suppliers with a share of 3 , 9% of the market and in 2008 have become the fourth largest provider with a market share of 4.9% , with Chilean exports going up by USD 566,200, experiencing a growth of 72.8% compared to 2007, must be strengthened with promotional activities.

There is now an active presence of more than 27 Chilean wineries, however only 12 of them have had a permanent presence in the market.

In October 2009, the government recently announced new wine distribution policies to allow the sale of wine  in shopping malls, supermarkets, restaurants and departmental stores, creating a more open consumer access to wine, believing that the consumption of wine is more healthy than hard liquor, the Trade Office has set goals through dissemination activities, participation in fairs, realization of Chilean Food & Wine Festival, Wine Shows, Inviting importers, inviting journalists related to Food and Beverage, Holding Chilean week in India with shows and wine tastings, to position Chile as the second supplier in the market with a 18% participation in the next three years and create a permanent presence of at least sixty leading Chilean Wine Brands in the Indian market.

The foremost thing, it is a combine effort of Central Head of Prochile, Indian importers of Chilean wine, the Indian Wine Academy, the Indian Wine Society and Chilean vineyard.

The Chilean strategy will be to promote quality wines oriented to the intermediate upper segment, given the fact that we would not like to compete with the local wines, wines from countries without wine tradition and the bulk wines bottled locally.

Reported with permission from Mr. Nestor Riveros

Commercial Counsellor

ProChile

Embassy of Chile

146 Jor Bagh, New Delhi

       

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