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Mallya raises a toast, wine segment on a high

By C H Unnikrishnan in Mumbai
July 14, 2006 11:48 IST
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The country's largest brewer -- UB group's plan to enter the wine segment is confirmed now with the acquisition of French wine maker Bouvet-Ladubay.

The domestic premium wine market, which is currently pegged at 5 million bottles per annum, is all set to witness a boom.

The UB's entry into the wine market in India is expected to open up this comparatively smaller business segment with the exposure of a host of internationally established brands.

The domestic wine market, which is quality and price sensitive, is currently controlled by four players -- Champaign Indage, Sula Wines, Grover Wineyards and Renaissance.

However, since the market is growing at more than 35 per cent for the last couple of years, many more new entrants are expected to foray in this market.

UB plans to introduce a few of the international brands in India as the French company is already an established player in the international market with a number premium brands.

UB chairman Vijay Mallya had recently announced his plans for the emerging wine market in India. The company is also currently in talks with few wineries in the country to establish a strong sourcing base within the local market.

"Wine is one of the most potential market segment, where the group is focusing on in India. The overseas acquisition would facilitate us to have the access to better technology and internationally accepted brand portfolio in this segment to explore this market. The wine market both in India and abroad is set to grow multi-fold and the quality of wine that is made in Europe would really make a difference for UB to explore this newly emerging market in India too," Mallya said.

According to an industry analyst, with the unmatching marketing network and its financial muscle, the group would soon be able to grab a significant share in the wide expanding market in India. The wine market in the is to grow three times in another two years, he added.

However, the existing players have seemingly welcomed the entry of UB into the fast growing segment saying that it would definitely help expanding the market.

In addition, it is expected that the market would grow mush faster in India, with the proposed delicensing move by certain state governments, the analyst added.

Shailendra Pai, managing director, Renaissance Winery, which has four premium wine brands in the domestic market, said that the any new entry into this segment would help expansion of the market.

"The entry of major players into the still nascent sector would not only expand the market but also bring better technology and practices into the market," he said.

The outcome will be increased awareness of wine among the consumers and availability of quality products and choices in the domestic market. This in turn will create competition, which will weed out inferior quality wines and units from the the market, he added.

The winery sector is also set for a boom in India as a host of the new wineries are being set up the in Maharashtra and Karnataka.

Since the Nashik winters are very similar to Napa Valley summers, this region in Maharashatra has been identified perfectly suitable for planting the Sauvignon Blanc and Chenin Blanc grape varietals.

The country has at present 42 wineries and according to industry sources another 80 to 100 wineries are expected to come up in the traditional geographies.

Industry data shows that wine consumption in India is growing at a rate of 35 to 40 per cent annually. Also, the country's premium hotels and restaurants are scrambling to update their wine lists with better wines and programmes offering wine appreciation courses are also springing up across the country, said an industry analyst.

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C H Unnikrishnan in Mumbai
Source: source