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It's raining wine!
Alok Chandra in New Delhi | June 09, 2007
Wine aficionados have taken heart from the news that the GoI has 'decided' to remove additional customs duties on imported alcoholic beverages from July. Decided, my foot. This move follows a complaint to the World Trade Organisation by both the EU and the US about the high total tariffs on this category, and has resulted in something that could have been done in a planned manner.
Nevertheless, legions of wine makers across the globe will take note of this development, and we should expect many more hopeful exporters to descend upon India in the coming months.
The reason why they are so interested is the maths: India presently consumes just 7-8 ml per capita of wine (9,00,000 cases -- including cheap 'wines'); if, over the next 10 years, this was to grow to just 50 ml per capita (China is presently 500 ml per capita), the total market would be nearly 8 million cases. Another 10 years and this could well become 50 million cases. Not so hard to imagine. Already, wine is the libation of choice at tony affairs in the metro cities -- it's either wine or single malts, and not too much of the latter either!
As you may be aware, there are already over 1,000 wine brands being imported into India -- a big increase, but just a fraction of the labels actually available worldwide. As the market grows, so will the number of wine labels continue to grow -- as they say, 'you ain't seen nothing yet'!
But don't break out the bubbly just yet: state governments are likely to hike up their own duties on imported beverages to compensate for the drop in customs duties, and it will take time for any benefit (by way of lower prices) to flow down to the consumer.
In any case, a drastic overnight reduction is neither warranted nor desirable -- what would be better is that duties are reduced annually by 15 to 20 per cent, so that over time they are in line with international norms. This would also give the domestic wine industry time to get better-established -- particularly the new units in Maharashtra and those that are expected to come up in Karnataka.
While I love tasting and drinking wines from different parts of the world as much as the next person, one looks forward to the day when Indian wines compete across the price spectrum with the imported drop.
This will not happen unless the domestic industry is provided a lot more time to grow -- in this harsh and unforgiving environment (for wines), like the grape vine, the industry's roots need to go deep to survive. The Indian government's efforts to draw attention to the huge agricultural subsidies in both the EU and the US have not progressed much -- this is one reason for the French "Wine Lake", and how small winemakers from overseas can afford to travel all over the world marketing their wares.
My wine this fortnight
The Coonawarra region (South Australia, near Adelaide) is known for its Cabernet Sauvignons and Chardonnays -- who knows, wines like these may presage a rebuttal of the ABC (Anything But Chardonnay) movement of yesteryear.