 Once mocked by the Indian elite as a drink for ladies, wine has become increasingly popular in a society mostly composed of spirit drinkers. Wine flows freely at many cocktail parties in India’s cities, and investors are increasingly keen to join the party.
High import duties have pushed foreign wine producers to collaborate with local manufacturers and over the last few years a slew of joint-ventures have been signed. But this is just the start. Expect to see more link-ups.
Grover Vineyards, the country’s second-largest wine producer, told beyondbrics that the privately held company is seeking an investment of $10m to expand marketing with the aim of boosting sales by 35 per cent in the coming year.
“We will see more of the foreign investment in the wine industry,” said Subhash Arora of the Delhi Wine Club.
“With foreign investment comes the technology equipment, management and possibility of marketing required to get past the initial hiccups the industry is facing,” he added.
In February, Kimaya, one of India’s largest luxury brands, announced a joint venture with Australia’s Global Wines & Spirits offering fine wines at Rs1,200 ($30) a bottle.
Sula Wines, the country’s largest producer, has also attracted attention from European investors in the past few years, while Mauritius-based French company E.C. Oxenham and Cy entered the market with Nirvana Biosys with a unique model geared at avoiding import duties. It produces wines in India using imported grape juice concentrates from Italy and France.
Imported wines face duties of 150 per cent and state-wide taxes – which vary from region to region – also add to the cost of foreign wines. These taxes, industry representatives says, have helped limit sales of foreign wine in India to about 200,000 cases a year.
Indians consumed 1.2m cases in 2010, more than 80 per cent of them domestically produced, with 400,000 cases sold in the Rs400 ($5 plus) category, statistics from the Delhi Wine Club reveal.
While the total consumption pales against the biggest wine drinking nations in the world, insiders remain bullish on the industry which is expected to grow 25 per cent annually for the next 25 years.
This bullishness is the result of fast-paced economic growth that has changed social attitudes towards alcohol, and wine in particular. India’s jet-setting professionals sip wine at home, and Indian women now consume more alcohol than a decade ago.
The Indian government is in no rush to cut duties on wines, but the signs for the domestic industry still look good; the fledgling sector still has room for more foreign partnerships, which will give Indian wine consumers access to a greater number of wines.
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