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The beat goes on
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| Bottles resting in peace |
Despite the negatives, consumption continues to grow.
The middle class of 30m people and growing is the potential market, although
less than 1.5m of them drink wine at present. Although the state’s
fiscal policies dampen the growth of premium quality wines, the vintage
of 2007 will be remembered in India as the start of easier distribution
norms, making wine more easily available. Sales through supermarkets were
conditionally allowed in states like Maharashtra, Karnataka, Punjab and
Haryana last year, which has added impetus to the growth. Today, there
are several imported labels available for as little as €10-12 a bottle,
which granted would retail for only €6-8 in Europe, but their availability
has helped increase consumption.
Quality still an issue
As producers can sell everything they produce, quality
is still more talked about than demonstrated. There are no specific wine
laws that define quality, specify grape varietals or the process of making
wine. Even the ingredients need not be mentioned, so the consumer is often
taken for a ride. A recent case in point were 155,000 nine litre cases
imported from Australia. Only 30-40,000 wine cases were in bottles. The
balance of 120,000 cases, or about 20% of total domestic production, was
bulk used to make ‘Indian’ wine. Aman Dhall, the biggest importer
and a partner with Grover Vineyards, complains that “We know that
a major producer bottles this imported bulk labelled as Nashik wine, but
in the absence of any specific laws, the winery goes scot free”.
Nonetheless, the results of the maiden India Wine Challenge held in London
and Delhi indicate that the quality of true Indian wine also needs improvement.
The best Indian red wine, the Nine Hills Cabernet Sauvignon 2007, mustered
only a bronze medal. The Sauvignon Blanc 2007 from Sula, the best Indian
white wine, did better and scraped through with silver, but there were
no gold medals. A wine board has been created to formulate laws that should
help. Meanwhile, the consumer has to ‘take it or leave it.’
In this light, Chateau Indage plans to open a wine university in collaboration
with Australia, which should be operative in a year or two, while a college
near Nashik already offers a technical diploma.
Opportunities galore
Producers are fully attuned to the demands of the industry,
with alliances and sub-leasing in evidence. One of the biggest corporations,
Reliance, has bought a small chunk of Indage, for example, while Sula
sold a stake to Future. Both minority partners are big in retail, offering
marketing synergies as well as working capital for expansion. Although
foreign direct investment or distribution is not allowed, technical collaborations,
marketing partnerships, cross-brand promotions and selling shares to Indian
importers are a few ways in which foreign wineries can participate in
the expected growth. Despite the recent fiscal measures making premium
wines more expensive, their easier availability has created a market for
them, which will continue to grow. The opening of branded luxury goods
stores in the large malls has allowed the latent demand for such icon
products to explode. Patience and perseverance are mantras as applicable
for the Indian wine market as yoga – or wine – for health.
And who knows, we may soon see English wines at a fancy bar in Delhi.
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