According to the President of the Delhi Wine Club who will be speaking about the "Indian Paradox" at FENAVIN 2007, to take place between May 7th and 10th at the Trade Fair Pavilion in Ciudad Real

03.04.2007 | 

The President of the Delhi Wine Club will be participating at FENAVIN 2007, National Trade Fair on Wine to take place between May 7th and 10th at the Trade Fair Pavilion in Ciudad Real, with a presentation that goes by the name of "The Indian Paradox".

Arora explains that "India, with a middle class of 250 million people, which is a great number of Indians, has the profile of a consumer that drinks wine as a way of life; although only close to 700,000 actually purchase wine, in comparison with the 200 million liquors they drink, 300 million of which were consumed last year".

Rues Sanjay Menon, the most passionate and best-informed importer of wine reports that "last year about 5 million liters of wine were sold, of which 1,1 million were imported. This is the Indian Paradox".

"Despite an annual growth in surplus of 25% and the fact that the Government announced free imports of wine and alcohols, in the last four years the average Indian has only consumed less than a teaspoon of wine per year. The tariffs that were imposed, locally known as customs rights, amounted to approximately 260% of a bottle, including compensatory duty that marginally favored the most burdened wines", reveals the President of the Delhi Wine Club.

He likewise comments, "distribution of wine is in great part dictated by sales, suppressing each state's policies. States do not only prohibit autonomy in the formulation of the policy for wine and alcohol sales, but they also have fiscal power to impose additional tariffs. The 28 states and seven territories that make up the Union operate on an individual level, independently formulating their policies. For example, in Delhi a tariff of 150Rs per bottle (3 Euros) is imposed on each bottle sold to restaurants, independently of the cost or quality. On the other hand, the distributor must deposit a record of the label with an annual burden of 5,000 - 10,000Rs (90-180 Euros)".

"The State of Maharashtra was at one time burdening wine with a tariff of 100Rs (2 Euros) per liter for imported wines, although this increased to 200Rs (4 Euros) in the year 2005 in order to protect the domestic wine industry. In Delhi selling wine in smaller stores and supermarkets was not allowed until 2 years ago and the extensive policies that were announced, which were to allow sale of beer and wine in supermarkets is still awaiting application", he manifests.

He also adds "Mumbai and Bangalore are more progressive in this respect, given that they selectively allow these types of sales. Most distributors present retail wine sales incompetently. In all of Delhi not a single warehouse can be found with appropriate storage space for wine, as is likewise the case with deficient staffing. One has to travel to Gurgaon to actually find a decent wine store, which is a satellite city inhabited by the new wave.

Lake Forest Wines are however located in one of the new generation tree-lined avenues, and a good selection of Indian and Californian wines can be found, correctly piled-up in an air-conditioned environment. The owner, Neeraj Sachdeva, who also has two warehouses in California, comments: "I want to extend my list, however, local laws do not allow me to store all Indian wines - and quoted prices for imported wines are ridiculously high". He directly imports his Californian wines.

India has predominantly been a country that did not drink, to the point of even including this principle in the constitution. The declaration in Article 47 of the Indian Constitution notes, "the state shall endeavor to bring about prohibition of consumption of intoxicating drinks -with the exception of those for medicinal purposes".

ALCOHOL, TABOO FOR MOST INDIANS

"Most Indians not only avoid alcohol, but in fact consider it to be taboo. No distinction is made between wine, beer and liquor. Despite the fact that the legal age for voting was reduced to 18 a few years ago, the legal age for drinking continues to be 25. The Government has foreseen reducing it to 21. And this in a country that consumes 120 million boxes of whisky, vodka, beer and other alcoholic drinks, thus the Indian Paradox", outlines Arora.

He likewise mentions "the market is extending in 30% for imported wine and in 35% for domestic wines. This growth is not only sustained, because it could in fact be even more conservative if tariffs were lower. In 10 years time the market could be twelve times its current size, reaching 60 million liters, and while tariffs drop, imported wines are halted in order to gain market share".

The President of the Delhi Wine Club says that "the number of importers selling more than a thousand boxes a year can be counted with the fingers of one hand, and 60% of all imports are made by only three companies: Brindco, Sansula and Global Tax Free Traders. The other 25% is shared out between an additional ten companies. Less than thirty companies handle the total balance. Thus it is not surprising that the three main companies import from the 'Old World', focusing on liquor, with wine as an addition, as a natural extension of the business. They are experts in import and distribution policies, and in their own way they are absolute jugglers, finding their way around the Government's machinery. They have also established an important pillar by adding new wine producers to their list, insuring their impressions of the label on the wine lists".

He finally points out that "publicity is prohibited in India. Therefore, promotions are limited to Wine Dinners and 'advertorials' (a sort of combination between publicity and editorial content) in newspapers. Events such as IFE India, (International Food, Drink and Hospitality Exhibition), which takes place in Delhi and Vinitaly Mumbai represent important vehicles for market surveys. These events insure that wines will be tasted by potential clients, likewise raising hopes that the adequate importer will no longer continue to be on the search for a market.