High spirits

High spirits

While the per capita consumption of wine in India may be low in comparison to other countries, the industry is growing at an annual rate of 25 percent

At a per capita level the consumption of wine in France is 70 litres, in the US 25 litres, 20 litres in Australia. In comparison, the per capita consumption of wine in India is only 9 millilitres. Clearly, you wouldn’t call India a wine-drinking country.

Religion, research says, is one of the main reasons for this. Throughout the history of India, religion has been an intrinsic part of its culture, permeating every aspect of life, from daily chores to education and politics. Although all the religions have had differing relationships with alcoholic beverages such as wine, Hinduism and Islam, the two most popular religions with a population of more than 94% of the country, forbid consumption of alcohol.

But then comes the surprising statistic that India’s wine industry is growing at an annual rate of 25% to 30%?

So clearly, the prospects of growth for wine in India are quite high. The wine industry of India is currently valued at $82 million, with an annual consumption of 13.3 million litres or 1.5 million 9-litre cases. Red table wine is a favourite among Indians and accounts for an estimated 52% of all wine sales. Wine makers such as Sula Wines are recording good profits of up to 25%. About 600 million Indian’s are currently below the legal drinking age and 100 million will come of that age over the next three years. So, the consumption of wine is expected to increase substantially. In spite of India’s high import tariffs, this country was one of the world’s fastest growing wine markets.

In such favourable conditions, an Indian Executive who is willing to take the opportunities in India can look at either going back home to manufacture wine or export it from here.  A small winery can be started in India with an investment of around $43,500. Required knowledge and machinery are available locally. Despite complexities in trading interstate and high regulations, there are low barriers if you satisfy the licensing and approvals required by the state and central government. Assistance is available in the form of “Food Parks”, which provide basic infrastructure facilities. The key is finding the right partners and links who understand the Indian market and legislations.

French wine accounts for a total of 45% and Australian wine 16% of the imported wine in India. Indian consumers are constantly on the look-out for good quality wine but, the high price of imported wine stops them exploring the idea further. A $5 imported wine may end up costing $25 in some states. States such as Maharashtra and Karnataka have taken steps to encourage the wine industry and give it preferential treatment by liberalising their excise regime and reducing excise duties.

Wine experts in Australia can look at various consulting opportunities or proving technology solutions. The wine industry is capital intensive with majority of dollars spent in buying the latest technology and systems. Technology plays a key role in the development of new grape varieties, planting and irrigation, quality assurance and traceability systems. Australian wine experts can look at providing consulting in the form of winery design and oenology services.

For anybody who has read John Steinbeck’s book The Grapes of Wrath; like the characters in the book who are constantly trying to find a place in this world, the wine industry of India is also trying to find its feet and it is only a question of time when the grapes of wrath will become the grapes of triumph.