India’s Wine Industry Stalls

I read an article by Jason Overdorf in the Global Post: India’s wine boom going bust? which surprised me given the news that Indian wine was breaking into the UK market with Waitrose becoming the first UK supermarket to stock wines from the sub continent. India is also being recognised in international competitions: Sula Vineyards Sauvignon Blanc 2010, produced in Nashik, Maharashtra, was given a silver medal in the Decanter World Wine Awards 2011.

In fact it has been reported that the Indian wine (two varieties – a crisp, aromatic white called Ritu Viognier and a rich, dark-fruited red branded Zampa Syrah) were so popular with Waitrose customers that they sold out within days. The white and red vintages were also grown in the Maharashtra region of western India, and were initially available as part of Waitrose’s ‘Rest of the World’ wine collection. Waitrose wine buyer Matt Smith said:

“Sales so far have exceeded expectations so we are looking at adding them permanently to our wine range.”

“The quality of Indian wine has improved a great deal over the last five years with investment and expertise pouring into the industry.”

In his article in the Global Post Overdorf points out that Indian farmers are shifting to table grape production due to the slack demand for wine. Grape varieties such as Shiraz, Merlot and Chardonnay are being grubbed up and being replaced with table grapes varieties Thompson Seedless and Sonoka.

Barely three years after the grape-growing region of Maharashtra went wine crazy — even ordinary farmers were supposedly sipping cabernet, it appeared — more than 40 percent of local wineries have shut down and local farmers have gone back to growing ordinary table grapes, the Indian Express reports.”

According to the Express:

“Almost all newly established wineries were owned by rich farmers from Nashik and Pune districts who had little or no knowledge about marketing. They had made a foray into the business with the aim to avail the benefits of government subsidies and make the most of the ‘wine boom’.

“Government assisted in setting up the wineries, it assisted in production, but gave no assistance in marketing. With increased number of wineries. the production exceeded the demand in the state. The consequence, obviously, was a glut,” said Mahindra Shahir, president, Maharashtra Grape Growers’ Association.”

Apparently the chances of local wine industry gathering the lost momentum are bleak:.

“There are several hindrances. Firstly, Indian wine cannot compete at the international level and has a limited domestic market. In India, though wine-culture is slowly catching up, the per capita consumption of wine remains dismal, at 9 ml per person, as compared to 25 litres in the US and 20 litres in Australia.

The quality of most varieties of the wine produced in the country doesn’t match up to the quality of wine that is in demand in the international market.”

Wine is primarily sold in urban centres, the market for Indian wine is about 1.2 million cases (nine litres each) a year and the country also imports 200,000 cases from Europe and a small percentage from Australia and the United States.

With Indian wine making its début on the British scene some Indian vineyards will obviously survive the storm but if wine is to take off in India itself then import duties and taxes will have to take a tumble.

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