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Posted: Wednesday, March 05 2008. 15:40

Booming Wine Market of India

The beat goes on

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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