Study Predicts Pessimistic Picture of Indian wine market

The Indian wine market, which is growing at a rate of 22 per cent per annum, is likely to touch nine million litres by 2010, on increased consumption due to rising income level, industry body Associated Chambers of Commerce and Industry of India (Assocham) said.

"Various factor such as large teeming population under 30-year fold, rising disposable income and the influence of western world are responsible for increasing consumption of wines in the country," Assocham President Venugopal Dhoot said in a release.

Major cities in the country such as New Delhi, Mumbai, Chennai, Kolkata, Pune and Bangalore together accounts for nearly 80 per cent of the demand for wine in the country, the chamber said.

Western India is the biggest consumer of wine accounting for more than 41 per cent of the total domestic wine market in the country followed by north India at 29 per cent.

Five star hotels, pubs and bar-cum-restaurants are the primary wine selling outlets in the country as 63 per cent of the sales volume passes through channels, the chamber said.

Delhi Wine Club does not necessarily agree with the estimates. The current level of consumption is not indicated. The rate of growth at 22% is too modest. Apparently, reduction of taxes, new capacity generation of the Indian wine industry by the likes of Seagram's, UB, Diageo, Chateau de Banyan, Nature's Bounty does not seem to have been included. Neither has the capacity increase of companies like Sula and Grover with their increased portfolio been considered.

The elimination of CVD is certainly going to boost the import of low end wines. The retail sector sales are being liberalised. The market is going to expand constantly in this segment. With modernisation, the duty free shops will find much higher sales, even though on a miniscule base.

The current growth is at a conservatively agreed rate of 25-30%. Even at a conservative estimate, based on last year's consumption of 7 million liters, a min sale of 12 million and a realistic level of 13 mill litres and an optimistic estimate of double the current estimate, i.e., 14 million litres by 2010 will not be impossible. All the socio-economi-fiscal c factors are in favour of a faster than the current growth, the protectionist policies of Maharashtra, notwithstanding.

We believe the most pessimistic and conservative figures have been given and the realistic ones have been shunned-editor




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