Grappling with Potential and Challenges

Even though the consumer trend in India is slowly shifting towards drinking wine, there is also another side of the story. Far too many instances of Indian wine makers are closing down operations. This may seem ironical and contrarian in nature but the fact cannot be ignored. Ashwin Rodrigues, Secretary, Wine Growers Association of India and Founder and Winemaker of Good Drop Wine Cellars, explains that three out of four small wineries are either shut down or are in a sick state. Large projects have also bit the dust. But that is not to say that the wine industry does not have potential in India. As Ashwin Rodrigues puts it, "The opportunities are limitless if the industry manages to remove the obstacles."

Sula has shown the way by not only being profitable investors by listing on the stock exchange. To put it simply, they have made money from wine in India and that, given the scenario, is a powerful statement, thinks Ashwin.

Meanwhile, the primary reason for failure can be attributed to over-regulation and their complexities. 'To add to it, wine is a difficult and delicate beverage to produce and our hot climate doesn't do us any favours, and it's often seen that quality of wine is not up to the mark with smaller wine players in India. Here's where WineGAl is stepping in," explains Ashwin.

Tackling Taxation and Regulations

The Indian wine industry grapples with high entry costs to a market like high label registration charges, high taxation and inconsistent state policies. Given that, WineGAl has established contact and built rapport with excise departments of over 15 states. In a short time, it has brought about a meaningful change in excise policies. 

In Delhi, WineGAl was instrumental in bringing down the label registration fees to Rs 5,000 before the policy reverted to the old one. In Rajasthan, it successfully lobbied for the elimination of additional excise duty and brought Indian wines at par with imported ones.

"In Uttar Pradesh we successfully lobbied for the introduction of wine in beer wholesale licences, for permission of sale of wine in can and against imposition of higher tariffs on fortified wine (which is a curse to the Indian wine industry). In Delhi, we organised a wine training workshop for the four corporations that run liquor retail stores to enable them to stock and sell Indian wines with confidence. In February this year we organised a wine standards and labelling requirements workshop in collaboration with FSSAl Mumbai, the first of its kind," elaborates Ashwin.

In Maharashtra, it has successfully brought about changes in licences such as FLW2 'wine only' retail licence for Rs 9,300, E2 wine bar-cum-retail licence and wine festival temporary one-day licence for Rs 3,500. WineGAI has appealed to bring fruit wines and meads at par with grape wines in all respects, and to reduce the tariff barriers on out of-state wines.

In Telangana, Rajasthan and Odisha, it has requested the reduction in demurrage charges at corporation depots. "In addition to this, as part of WineGAl's strategy to grow the industry, we have offered to hold 'Fruit Wine Symposiums' where we educate and empower entrepreneurs to set up wineries in that state so as to benefit industry and farmers. We held one such symposium in Uttar Pradesh which was a huge success. Thanks to the event, today there are wineries opening up in the state, he celebrates."

"The authorities have been open-minded and helpful, or at the very least, did hear us out. We understand that change does not happen overnight. It's a process that begins with rapport-building. With persistence, perseverance and singularity of purpose we are confident that reforms will happen over time," Ashwin avers.

Efforts for Raising the Quality

WineGAl would like to tackle headlong the main issues that the industry is facing. The first is raising the quality benchmark and improving the quality of Indian wines to global standards. Towards this, it has initiated research and development projects, wine technology meet-ups, and a mentorship programme. More are in the pipeline. From a regulatory viewpoint, its efforts are on to reform, streamline and harmonise rules and regulations across states.

Along with marketing, WineGAl will be commencing a certification programme, wines of India programme, wine festivals and also develop a strong social media presence. They will also have a few social responsibility programmes in the offing such as a 'drink responsibly' campaign.'

Consumer Preferences

Indians are still drinking mainly red wine, while the consumption of whites and rosé is still much smaller. Sparkling's consumption is growing. The awareness levels is also low and wine is still complicated in the consumers' minds and most are not confident when either picking up a bottle at a retail outlet or ordering wine at a restaurant.

"What's refreshing is the surge in meads and fruit wines, which are approachable and a lot easier to understand. They might just hold the key to the future of the industry," he observes.

"In the western world, wine is anywhere between 25 to 33 percent of the alcobev pie. In India it is less than 1 percent. This is both a challenge as well as an opportunity. A challenge because for an industry to grow, barriers to trade must go, and investment needs to come in.

An opportunity because of the huge potential for growth, with India being a young and exploratory alcobev market," Ashwin explains.

The challenge is to grow the Indian wine industry in the face of stiff competition from imported wines and other alcoholic beverages such as gin, whisky, etc. "If we do get our act together, the potential is huge. We have the ingredients to be a world-class producer of wines," Ashwin states.

The Geographical Advantage

India has certain geographical pockets that are most ideal for wine production. Trials on wine grapes are being conducted in Bareilly in UP, in Rajasthan, Madhya Pradesh and Telangana. Apart from that, there are many regions growing indigenous or hybrid varieties of grapes which may be suitable for wine making such as Srinagar, Nagaland, Mizoram, Meghalaya, Kinnaur in Himachal Pradesh and Cumbum Valley in Tamil Nadu.

What is needed is to empower the local entrepreneurs with knowledge, training, infrastructure and finance. WineGAl can play the role of advisor to state governments and be the catalyst in the establishment and sustainable growth of these regions.