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Posted: Friday, August 01 2008. 14:22

IWSR Report Validates delWine Survey

Recently published IWSR survey on the Indian market validates the findings of the survey carried forward by the Indian Wine Academy, wherein it had estimated the total market for the imported wines last year at 220,000.

While  most reports and estimates range from 160,000 to 200,000 for 2007-08, IWSR report extrapolated the still wines market at 210,500 cases while the total market  includes sparkling wines etc and the total imported market is shown to be at 242,250 cases, the figures generally corroborating those estimated by IWA. 

Assumptions and Anomalies

A cursory and random look at the report raises a few questions some of which are addressed below:

Smuggling

The IWSR report and indeed the survey by delWine are both silent about the extent of smuggled wine that reportedly enters Maharashtra and Pondicherry and the south-east coastal belt where there is a lucrative market for these wines.  The IWSR does mention that 60% scotch in India is smuggled, without any mention about wine.

With up to 420% duties and taxes on wines in Mumbai, the extent of smuggling would be anybody's guess.  Maharashtra has 40% of national market (it should be on the decline right now) and with half the time the bureaucratic procedures making it cumbersome to deliver legally, the parallel market must thrive from Dubai and Srilanka with Singapore feeding the south.

Italian Wine Imports

The report seems to be very conservative on the import of Italian wines. It assumes a total import of 16,000 cases, 8500 of them being from only two producers, Banfi and Frescobaldi. Granted these labels imported by Brindco are big movers, but surely the rest of the sales in the country by 73 Italian producers (Italian Wine Guide 2006 published by Indian Wine Academy lists 75 producers selling in India in September 2006) could not be selling only 7500 cases! In fact, there were over a 100 producers exporting during the period in question, the quantity notwithstanding..

Spanish Wine Imports

The report assumes only 4000 cases of wines imported from Spain, including 1000 cases of Cava. Torres alone imported over 3,500 cases of Spanish wine from its own stable. While the report ascribes 750 cases of Freixenet sold, Global Tax Free refuse to acknowledge that they sold a case less than 2500. Therefore, the total sale of Spanish wines has been much more than 4000 estimated by the survey.

Indian Sparkling Wines

Sparkling wine has gone up from 20,000 cases in 2005 and 21,500 cases in 2006 to a mind-boggling 251,250 cases in 2007. On digging deeper into the Report one finds out that 200,000 cases of Vino sparkling wines were sold by Champagne Indage at Rs. 75 a bottle made from eating grapes.

Whether or not it should be considered a wine will be the subject of many seminars and cocktail meetings. But it is important to note that the Delhi office confirms that the Vino sparkling wine is in half bottles, i.e. 375 mL. The local website of DSIDC also confirms the quantity, though the price mentioned is 375 mL. This means that the additional sale even if the category of wine is allotted to it, should be 100,000 and not 200,000 provided 200, 000 cases as claimed have been actually sold.

Even Marquise de Pompadour which sold 13,000 cases in 2006 seems to have jumped to 30,500 cases with no apparent reasons..

On the sideline, one may of course estimate the profit margins that have been available to producers selling various labels from Rs. 250- 550 a bottle for as far back as 20 years, using mostly eating grapes.

Indian wine industry grew from a total consumption of 971,750 cases in 2005-6 to 1.498,000 million cases as an outet including the imported wines, according to the report.

The Low Priced Indian Wines

This is an area which may not interest wine connoisseurs but nevertheless it is important to know how much wine is selling in the low end range. While the study estimates it to be around 200,000, including Goa Vinicola (80,000), Golconda (15,000) and Bosca (10,000), many knowledgeable persons think the production and consumption would be higher.

Despite some of its pitfall we could pick out at random, this should also be pointed out the survey provides a lot of interesting facts and figures

Comments:

 

Posted By : Gurpal oberoi

August 05, 2008 16:22

Dear Mr Arora,

Let me take this opportunity to congratulate you about your efforts to educate Indian customers on civilised wine drinking. It is a highly informative site.

I would like to meet you as we are reaching Delhi on 26TH AUG 08. I have about 20 years plus International retail experience in wine retailing from London, and have worked in top UK stores like Threshers and Waitrose super market.

I would like to use your expert advise.

 

   

Posted By : Subhash Arora

August 02, 2008 11:08

Central duty is 150%, in maharashtra 200% excie. On the total 350% there is VAT at 20%. Total=420%.
In actual practice it works out more. One has to pay 4% SAD which is refundable but when? there are some educational cess etc added to the duties. It works out to be around 426%.
Please do take up with Maharashtra government and tell them wine is not alcohol.Wine is totally universal that goes beyond boundaries and all wines are different personalities and that wine is a food item. They should charge as much duty as they do on imported cheese, apples or ham.

   

Posted By : Ramesh Pawar

August 02, 2008 8:13

....With upto 420% duties and taxes on wine in Mumbai. We are taking up this issue with State Govt of Maharashtra. Will you pl give the details of 420% like Import duty,State Excise,Octroi etc. Best Regards, Ramesh Pawar President,Nashik Wine Club

   
       

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