An Analysis of Indian Wine Industry

8/8/2019 An Analysis of Indian Wine Industry

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An Analysis on

Wine Industry in India

PRESENTED BY:

GAGAN GUPTA

(PGMP+MBA)


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Synopsis

Wine consumption --Preferences

Government Support

The Market

The essentials/Major aspects

Problems faced


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Introduction

The People of India

Annual Per Capita Income Rising

Large Population Gives a Market Base

Government Backed IndustryWine Declared as Small Scale

Grape is grown over 60,000 ha - production of 1.6 MT

Wine Industry Potential

Market Currently in Infancy Stage

Wines Beginning to Catch On Locally and Globally


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The People

Indian Economy 2005 2006 2007 2008 2009

Population (millions) 1,095.4 1,110.4 1,125.4 1,140.2 1,155.0

Household consumption (US$ billion) 2028 2210 2419 2651 2910

The rising middle class within India is bringing with it a higher

rate of consumption

Wine consumption is also increasing at a rate of0.5ml per year/

per person

Growth: 9% 9.4 9.5 9.7 9.1


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Government Support

Wine Declared as a Small Scale Industry

Manufacturers exempted from excise duties

38 Wineries Currently in Operation

36 located within Maharashtra 5.4mn liters produced annually within Maharashtra

India totals 762,000 cases sold per year

State Bank of India, for the first time in the country, has taken the initiative

for helping the grape growers via project UPTECH


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The concessions/incentives/subsidies

grants etc. are extended to Wine

Industry at par with Food Processing

industries

project subsidy of Rs.50

lakhs/wine unit Rs.10 lakhs per year towards

procurement of grapes

grant of Rs.4 crores / wine park

Government Support


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The Market

Wine expanded phenomenally by around 18% in 2008

Total Indian Consumption has risen to 650,000 cases (2008-

2009)

6-7ml annual per capital consumption

Target Market

Middle class ages 25-39

Current biggest wine consumers

Trendy upper class


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Marketing

Open Markets Maharashtra, Jammu Kashmir, Goa, Assam, Meghalaya,

Tripura, and Arunachal Pradesh.

Auction Markets

Rajasthan, Madhya Pradesh, Bihar, Haryana andChandigarh

Government Markets

The governments of the respective states act as the

wholesalers

TASMAC in Tamil Nadu, BEVCO in Kerala, APBC in Andhra

Pradesh and The DSIDC in Delhi


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Consumer Preferences

Wine Consumption

Red 45%

White 40%

Sparkling 13%

Ros 2%

Traditional Red and White wines account for 85% of

Indian wine consumption


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The Current Scenario inSouthern Regions


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Indigenous Wineries Chateau Indage

18 types of wine

Chardonnay, Cabernet Sauvignon, Ugni Blanc,

Pinot Noir, Gamay, Riesling, Muscat of Alexandria

Sauvignon Blanc, Chenin Blanc, Zinfandel,

Viognier, Shiraz, Malbec and Grenache

Grover Vineyards

Nine varieties

Zinfandel ,Chardonnay, Pinot Noir,

Sauvignon Blanc, Chenin Blanc,Viognier, Shiraz,

Viognier and Semillon

Sula winery Sula Brut, Sula Seco and Sauvignon Blanc


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Maharashtra wine Grape policies

Declaration as a Preferential Area

Declaration as a Small Scale Industry

Concessions in Excise Duty

Concessions in Sales Tax Wine Sales License

Wine Sales License Fee

Simplification in the system of License

Establishment of Wine Institute

Single Window System

Establishment of Grapes Board

Facilities of Food Processing Industries


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Wine Parks

To encourage value addition on grapes

Grape Board

for quality control, certification and export promotion.

Wine Institute

long-term growth strategy.

MIDC has set up Wine Parks with International comparableinfrastructure

at Vinchur, near Nashik & Palus, near Sangli


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Karnataka

The Government intends to

Establish two Wine Parks.

Capital Investment Subsidy

Subsidy for Grape Processing

Incentives for marketing and distribution ofwines


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Andhra Pradesh

Government of Andhra Pradesh has issued G.O.framing new

rules on Winery projects.

Very low fee of Rs. 2000 per annum is fixed as license fee to

encourage this industry.

Government may call for applications for grant of letters of

intent in the near future.


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Winery Project in Tamil Nadu

Tamil Nadu produces 90,000 tonnes of Muscat Grapes and10,000 tonnes of Thomson Seedless Grapes.

Government of Tamil Nadu has issued a Notification on TamilNadu Wine Manufacture Rules 2006 for regulatingmanufacture of wine.

Government of Tamil Nadu has approved the proposal ofTIDCO for establishing a Winery

.


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Major aspects

The primary factors acting as constrain for this

industry in India.

At the very outset we have four major issues

to note:

1. Legal aspect,

2. Global aspect,

3. Social aspect and

4. Promotional aspect.


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Problems Faced..

Wine drinking has not caught on

quality wines are priced relatively high.

Since the volumes are low, production costs are high, as

are taxes.

Real challenge -to develop a domestic market

Huge prohibiting factor - 300 per cent duty slab

To distribute finished goods


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Various taxes and duties applicable to the wine

industry

Excise Duty

Additional Duty

Markets & Regulations

Centre for Civil Society

Distillery/Brewery License Fee

Bottling fee

Litterage fee

Assessment Fee

Franchise Fee

Permit Fee

Various taxes and duties

applicable to the wine industry

Raw Material Excise

Availability Fee

Brand/Label Fee

Transportation Fee

Import Pass Fee

Export Pass Fee

Vend Fee

Sales Tax/Surcharge

License Fee

Toll Tax Excise Duty

Additional Duty

Gallon age Fee


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Standards

Ethyl alcohol -prescribed in 4 ofIS 3752:1988

Enforced by State Excise Authority

Food additives - PFA /CODEX /JECFA

Flavor -PFA/FEMA GRAS Carbonation -Grade 2 of IS 307:1996

Packing

glass bottles -IS 1662:1974

plastic bottles made of PET -IS 14537:1998

Sampling - IS 3753:1984


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Conclusion

Presently Indian wine industry is in a nascent stage, though it has

kick started only from Maharashtra much remains to be seen at

the national level.

Indians will have to descriminate wines with other alcoholicliqours.

The wine in fact is a social and health drink,

its consumption has to be promoted through various media campaigns

and wine festivals.

We hope, subsequently there exists a huge scope for expansion

in area and production of wine grapes in our country.


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References

1. Multiple aspects of Indian Wine Industry

Karnika Seth

2. Present Scenario of wine industry in India

G.S.Karibasappa, P.G.Adsule , S.D.Sawant and K.Banerjee N.R.C. for grapes,

Manjri Farm, Pune 412 307.

3. Wine project APICTO

4. Winery Project TIDCO

5. Maharashtras grape policy 2001

6. Karnataka Grape Processing and Wine Policy 2007

7. DEssenceconsulting WineReport

8. Wine Industry in Maharashtra

Sudipto Mitra

An Analysis of Indian Wine Industry

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