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Wine culture takes India by storm

Kishore Singh | December 11, 2004

Politics and wine make strange bedfellows. But Union Agriculture Minister Sharad Pawar, who nurses a large constituency of grape growers in Maharashtra, is apparently lending a sympathetic ear to the Nashik Wine Growers Association.

Already, the state has completely abolished excise on wine duties and lowered sales tax from 20 per cent to 4 per cent, unleashing an unprecedented demand for vineyards in the Sahyadhri valley.

Eight wineries have opened for business; more are expected as liquor majors realise the potential for profitability in the wine business.

And laughing all the way to the bank is a Stanford engineer who crushed his first harvest of grapes for the Sula winery in 1999. Five years later, Rajeev Samant's Sula brand is moving up the value scale with a Rs 20 crore (Rs 200 million) turnover across 70,000 cases, achieved when a second winery was added to the first, together bottling almost 800,000 litres of grape juice into premium wines.

"The wine culture has taken India by storm," says Samant, who is now vying for leadership of the Delhi market from established player Chateau Indage which has enjoyed both first-mover advantage in the industry as well as higher volumes (250,000 cases).

According to Delhi excise statistics, for the period April-September, Sula increased its 13 per cent share last year to 36 per cent while Indage dropped from 48 per cent to 39 per cent, and Bangalore-based Grover also dropped from 34 per cent to 26 per cent.

Clearly, the market has changed beyond all recognition in the last two years, and the change is being fermented in the Sahyadhri valley.

"The lack of quality wine made specifically for India was the only impediment," says Samant, who boosted the market in varietals and made the catalystic difference when he began to introduce new labels faster than India could consume them.

Having saturated the market with whites, Sula is now determined to exploit varietals in reds, launching its cabernet shiraz in Delhi this week, while introducing Mumbai to cabernet shiraz reserve and a chenin blanc dessert wine next week.

By the end of this year, in Maharashtra alone, 6,000 tonnes of grapes will have been crushed for making wine, a figure Samant would like to see growing to a formidable 50,000 tonnes in another five years.

"At Rs 100 crore (Rs 1 billion) value for farmers," he says, "it's a way of boosting rural incomes." No wonder he's been camping in Delhi to lobby with Pawar for more concessions, such as abolishing the regressive label registration fee, easier licensing procedures, and sale of wine in supermarts.

"We want to provide good drinkable wines at a good price," he chants.

Sula may have made most impact in the market, but Indage isn't giving up on the fizz just yet. It has just won two bronzes in the still wine category from 8,800 entries in London's Wines and Spirits fair, and marketing head Vikram Chougule is kicked about it.

"India is now on par with other wine growing countries of the world."

Indage's vineyards are all located between Pune and Nashik and cover a huge 2,300 acres which, Chougule says, could increase to 2,800 hectares in the next three years.

Nor is the unprecedented 20-30 per cent annual growth in the market likely to slow down yet -- at least not in this decade. Domestic consumption may be fuelling most of it, but both Sula and Indage are exporting large volumes overseas.

Sula, which invested Rs 4 crore (Rs 40 million) in setting up its second plant, is all set to return Rs 1.5 crore (Rs 15 million) year-on-year as investment in more vineyards. It now owns 350 acres of which 150 acres are currently planted with grapes, and the rest is to be planted over two years.

"This ought to yield 1,500 tonnes at full plantation five years later, but we're already crushing 1,500 tonnes this year of which only 300 tonnes are ours," says Samant.

A note of caution is, however, sounded by Kapil Grover, who spearheads Grover's Vineyards in Bangalore, Karnataka. "I wonder who is advising the Maharashtra government," he asks, "on the scale of the vineyards?"

According to some estimates, as much as 12,000 acres in and around Nashik is supposedly under wine grape cultivation.

Grover does a rough calculation: with 5 tonnes of grapes per acre, enough to produce 5,000 bottles of wine, the so-called 12,000 acres under grape cultivation could see serious over-production of 6 crore (Rs 60 million) bottles. "The wine industry is growing at 30 per cent which is sustainable," he says, "anything above that is not."

Certainly, competition from the new wineries is still a tad difficult to spot on the horizon, but Nashik itself -- for all its terroir and ideal grape growing conditions -- may just feel the heat from other states.

Karnataka has been a traditional competitor with Grover based there, but Indage is now expanding to Himachal Pradesh.

"The climate in Kullu and Manali is like that of Bordeaux," says Chougule, where the company has planted merlot, cabernet and sauvignon blanc grape varieties, and hopes to get into production in three years. "While Maharashtra has very Australian wines, the Himachal wines will be French in style."

Once again, Kapil Grover dismisses Maharashtra's superior claims to better terroir.

"We experimented with grapes in eight-10 places in India, and chose Bangalore based on the results, whereas in the case of the other promoters the provocation was not to make wines but provide value-additions to the agricultural land they owned. There's no better place in India for making wine than Bangalore."

Narayangaon, Nashik, Kullu-Manali or Bangalore, regardless of where it's bottled, Indian consumers at least can look ahead to uncorking better wines amidst claims and counter-claims of quality and quantity, values and volumes. Amidst a battle for leadership, that's something to cheer about.



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Number of User Comments: 2




Sub: to know budget of winery instalation

hi i want to know the budget of the winery


Posted by Dinesh





Sub: wines in india

Good article on wines in India . Yes a growing market. also lot of wines being imported.. important point from Grover, over production could spell ...


Posted by jacob




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