Indian Wine Industry Report

INDIAN WINE INDUSTRY REPORT

2004-2005

DSM Marketing Pvt. Ltd. Copyright 2005

Indian Wine Industry Report 2005

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Table of Contents

Section 1 Introduction to Indian Wine

1. Executive Summary2. History of Indian Wine3. Current Scenario4. Categories5. Wine grape growing regions

Section 2 Indian Wine Market Analysis

1. Market Size 2. Market Share 3. Porter’s five Forces Analysis4. SWOT Analysis5. Price Segmentation6. Consumer Segmentation7. Market players and Indian Wineries8. Key Importers

Section 3 Indian Wine Market Data

1. Indian Wine Market Category-wise, Volume and Revenue2. Indian Wine Market Region-wise, Volume and Revenue

Section 4 Wine Market Forecast 2006-2010

1. Category-wise, Volume and Revenue2. Region-wise, Volume and Revenue

Section 5 Wine Rating

1. Indian Wine by Varietals2. Indian Wine by Price3. BIO wines by Indian Importers4. BIO/Bulk wines by Indian producers

Section 6 Key Information for new players

1. Taxation and Duty structure 2. Maharashtra Wine Parks3. Foreign tourists growth rate


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Annexures

SalesAnnexure 1. Wine market category-wise: Volume 1997-2004Annexure 2. Wine market category-wise: Revenue 1997-2004Annexure 3. Wine market category-wise: Volume Growth 1997-2004Annexure 4. Wine market category-wise: Revenue Growth 1997-2004Annexure 5. Wine market Region-wise: Volume 1997-2004Annexure 6. Wine market Region-wise: Revenue 1997-2004Annexure 7. Wine market Region-wise: Volume Growth 1997-2004Annexure 8. Wine market Region-wise: Revenue Growth 1997-2004

ProjectionsAnnexure 9. Wine market category-wise: Volume 2005-2010Annexure 10. Wine market category-wise: Revenue 2005-2010Annexure 11. Wine market category-wise: Volume Growth 2005-2010Annexure 12. Wine market category-wise: Revenue Growth 2005-2010Annexure 13. Wine market Region-wise: Volume 2005-2010Annexure 14. Wine market Region-wise: Revenue 2005-2010Annexure 15. Wine market Region-wise: Volume Growth 2005-2010Annexure 16. Wine market Region-wise: Revenue Growth 2005-2010

Wine RatingsAnnexure 17. Varietal-Wise Indian Wine 2004-2005Annexure 18. Indian Red Wine by price 2004-2005Annexure 19. Indian White Wine by price 2004-2005Annexure 20. Indian Sparkling Wine by price 2004-2005

Other Annexure 21. BIO wine by Indian Importers 2004-2005Annexure 22. BIO/Bulk wine by Indian Producers 2004-2005Annexure 23. Foreign Tourists Growth rate, India – 1995-2005Annexure 24. Foreign Tourists Growth rate, India – 2006-2010


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SUMMARY

The wine industry report provides extensive information about the Indian wine market in the context of its size and brands currently available. The report also details the wine industry projections for the next five years.

The Highlight of the report is the Wine Rating on the quality parameter by an international qualified wine advisor.

This report will be extremely useful and is a must to new players wanting to invest in Indian wine market. Currently the Indian wine industry is growing at the rate of 25-30% per annumn, with few good wine makers.

This report is complied by two professionals after studying the Indian Wine industry for over a year and personally visiting the wineries and tasting almost all the Indian wine on the shelves.

Dr. Aakash Singh Rathore LLM

Aakash, born in New York, holds the internationally recognized title of Certified Wine Advisor, having studied enology in the USA and Europe. He is currently associated with Delhi University as a Reader in the Dept. of Philosophy.

Sameer Bagul BE, MBA

Sameer, a wine enthusiast, an IIM Calcutta (Premier B-School in Asia) graduate has experience in Sales and Marketing in consumer goods, education industry.


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HISTORYThe history of wine in India goes back to ancient times, although it’s peak

eras date to the time of British presence. In India, generally, wine tended to be brought into the culture by various waves of conquerors and sojourners; however, there are several references to an indigenous production of wine in both North-western and Western India.

One of the names for wine in ancient India was Drakshasava. Artefacts from Harappan civilisation indicate indigenous familiarity with wine. In the Vedic period, it is occasionally argued, wine was known as Somarasa, associated with Indra, and poured as a libation and drunk at religious festivals. Actually, I doubt this was wine, but there were certainly some references and uses of wine before Alexander the Great brought vines with him to northern India. For example, pre-Alexander Shaivite cult practices – in this sense analogous to Greek Bacchic rites – involved the use of wine as an intoxicant.

Kautilya’s Arthashastra, which dates from somewhere between 321-150BC (that is, during the Mauryan Empire, which was in the making during Alexander’s conquests in north-western India), discusses “alcoholic beverages made from fruit,” though it is not clear that wine proper is meant. And moving ahead to the era of Mogul rule, the Persians had a famous wine, Shiraz, which was often sent to the Moguls in India, and later to the British.

From the moment the British set up the Surat factory (1612), wine began becoming more and more familiar throughout India. Due to the cost of shipping wine to India, the British planted vineyards, in Surat, and also in Kashmir. Some of the domestics were drinkable, in spite of the fact that viticulture was hardly known in India. As the production was really picking up, a phylloxera epidemic destroyed all the vines in India, just as it had done in Europe as well. Whereas Europe replanted with resistant (American) root stocks grafted on to superior European vines, India did not. Thus, from the British landing in Surat in 1608 to today, the vast majority of the wine drunk in India has been imported.

With the invention of Indian pale ale, beer began to overtake wine consumption in India in the 1820s, and then from around 1840-1870, brandy began to be recognised as the drink of choice. At the same time, with soda becoming widely accessible, whisky became a strong contender. Additionally, around the 1860s, when the Schweppes company began marketing its anti-malaria tonic, gin began to gain currency as the best means for making tonic palatable. Finally, in the 1920s to 1930s, cocktails became a fad worldwide, and even today in India, cocktails, whisky soda, rum and brandy are far, far more widely consumed than wine.

Nevertheless, wine consumption in India is currently increasing at a rate of over 25% per year and certain domestic wineries yearly sell out their entire stock. The best cannot keep pace with demand. Indeed, it is expected that wine consumption in India will grow tenfold to reach an average consumption of about 60 million bottles in the next 7-10 years.


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CURRENT SCENARIOToday the overall sales are around 600,000 cases a year. Table wines account for 88-90 percent of the market and expensive varieties of vintage wines account for the remaining 10-12 per cent.Though the base of the market is small at 6 lac cases / year currently the wine industry in India is growing at the rate of more than 25% per annumn.

There are three big companies presently making ‘Premium’ wine – Indage, Sula and Grover Vineyards. Others (Shaw Wallace, McDowells and the six Goa-based companies) produce cheaper wines from table grapes and the bulk of the Goan output is consumed within that state itself. However, more and more wineries are being set up with the aim to produce mainly ‘international style’ wines, namely Vinsura

While Indage is the market leader, Sula’s volumes grew by over 65 per cent last year. Already there are more than 30 wineries operational with over 100 Indian brands. Australians being the best exporters are already here with Howling Wolves wine Group (HWWG), Ironstone vineyards, Greenpoint wines. Others include Terraza, Casa Lapostolle from South America along with old liquor majors in India like Seagram’s and UDV. See the Indian importers list (Page 28). Sopexa, a French marketing and promotion board has setup office in India with a plan to increase French wine import in India by 50% in next two years.

In the next few years, there would be over 100 wineries of varying sizes operating in the country, and with the government support in reduction of duties, the prices wouldreduce leading to the growth in this industry. We believe that this will lead to consolidation in the wine industry with few big players and few small players in the market.


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CATEGORIES

There are basically three types of wine:

1. Premium Wines (Still wines)

2. Sparkling Wines

3. Fortified wines

This report focuses on the largest and most important category of wines (Premiumwines), ignoring the cheaper country-made concoctions and fortified wines, whichare also not yet made or regarded as quality wines. In the Still wine or premium winecategory the Indian market is divided mainly into two major categories:

White and Red wines. Note: Sparkling is generally considered in White category by many consumers.

Further all the wines available in the above categories is divided in following three categories

Domestic Indian WineThis is the wine, which is produced from Indian grapes and bottled in India by the domestic wineries.

Foreign Bulk Wine Bottled in IndiaFew large domestic producers import bulk wine and bottle it in India.

Foreign Wine Bottled in originMore than 200 brands are currently available in this category that are Imported by Domestic players, Importers and Foreign players.


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WINE GRAPE REGIONS IN INDIAThe Indian sub-continent has four major wine producing regions

Nasik Region (Maharashtra State)

Location: Western India, Nasik Valley is 2000 ft. above sea level between 19-33’ to 20-53’ North latitude and 73-16’ to 75-6’ East longitude.

Sangli Region (Maharashtra State)

Location: South West Maharashtra; Latitude 16-52’ North, and Longitude 74-36’ east

Both of these regions are extremely good for growing grapes due to its monsoon rains, rich fertile soil and cool climate. Most of the Indian Wineries are located in these two regions including the largest Indage and Sula Vineyards.

Bangalore region (Karnataka State)

Location: South West, Latitude: 12- 8' North. Longitude: 77-37' EastApart from being nation’s IT capital Bangalore because of its cool climate is suitable for grapes. Grover, third largest wine producer of India, has its winery situated in Dodballapur, 2000 ft above sea level, 45 km North of Bangalore.

Himachal region (Himachal Pradesh)

Location: 30-22’ to 33-12’ North Latitude and 75-47’ to 79-04’ East LongitudeThis region lies in the northern India and is at the same latitude of the South Californian, Texas and north Florida wine grape growing region. Though this region is well known for the apples and cider some of the good wine is produced here. Temperature varies from 39° C in plains during summer - 20° C in the Alpine Zone during winters. Rainfall varies from 152 cms to 178 cms in outer Himalayas.


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NASIK REGION

SANGLI REGION

BANGALOREREGION

HIMACHALREGION

WINE GRAPE REGIONS


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Section 2

Indian Wine Market Analysis


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MARKET SIZE 2005Indian Wine Market - Volume (Cases)

Category 2004-05

Premium Wines (still) 277550

Sparkling wines 49280

Sub Total 326830

Cheap and fortified wines 271920

TOTAL 598750

Indian Wine Market - Revenue (Rs. Crs)

Category 2004-05Premium Wines (still) 133.2Sparkling wines 37.0Sub Total 170.2Cheap and fortified wines 39.16TOTAL 209.3

Indian Wine Market – Winery Sales#

Company 1997 2002 2003 2004Indage 25,000 85,000 100000 110000Grover 12,500 21,000 35000 42000Sula 0 12,000 15000 27750Others 0 0 2000 8000Imported 12,500 40,000 60000 70000Total cases 50,000 158,000 212000 259754

# Company brochures, secondary sources, the actual numbers may vary.

1 Cr. = 10 million


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MARKET SHAREChampagne Indage Ltd is the current market leader in wines in India with a total production of over 100,000 cases. Sula is gaining strength and soon poised to take its market share over Grover.

Market Share 2003

47%

17%

7%

1%

28% Indage

Grover

Sula

Others

Imported

Market Share 2004

43%

16%

11%

3%

27% Indage

Grover

Sula

Others

Imported

Market Share 2005 projected

38%

16%15%

4%

27% Indage

Grover

Sula

Others

Imported


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Porter’s Five Forces Analysis

The model of five competitive forces is applied to the Indian wine industry to understand and analyze the industry structure in a better manner.

These forces determine the intensity of the competition and hence profitability and attractiveness of the industry. The objective of these forces is to help strategize the company’s policies in a way that it improves the position of the company in the industry.

Bargaining power of consumers

Bargaining power of suppliers

Threat of substitutes

Internal competitio

Threat of new entrants


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The power of suppliers

The wine industry’s main suppliers are the grapes producers based in rural India. Most of the farmers sell their produce through co-operatives or individually to the wineries. The market is fragmented with small and medium farmers planting common Varietals.

The top three wineries, integrating backwards, have planted grapes on hundreds of acres of land to control the quality of produce, costs and Varietal selection. However they also have signed long term contract with the local farmers for primarily common varieties. Contractual farming is a win-win situation for both farmers and wine producers but still it has long way to go. As wine grape cultivation yield is very low compared to the table grape varieties farmers are skeptical about the returns and hence contractual agreement with the wine producers provide assured income. The farmers are planting common varieties like Sauvignon Blanc.

A few large and medium farmers have planted Zinfandel and Chardonnay and have higher bargaining power for these Varietals. The industry has also seen forward integration with large farmers starting new wineries however are unable to sell their product due to lack of expertise and understanding of the consumer market.

As the wine industry will move from its current expansion phase to consolidation phase and increased volumes the suppliers will be able to see increased profits.

The other suppliers of bottles and corks (read importers) have good bargaining power due to non-availability of corks in India and better glass quality than Indian bottle manufacturers.

The power of Consumers

Traditionally the wine consumer was in the niche segment and had fewer options for Indian wine. The good wine in India was very expensive and the less expensive wine was of very poor quality. The wine was never meant for the masses. However growing awareness and changing lifestyles have changed this scenario and suppliers today are forced to offer lower prices to the consumers. The capacity increase is also responsible for the downturn of the prices. The power of consumers is going to be high as the market increases and more market players offering better quality wine.


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The threat of New Entrants

The wine industry is not very capital intensive and with the government subsidies it is easier for new players to enter in the market. The current government policies are pro new wineries with zero excise duties and low license fees.

However the brand equity of old players and the economies of scale they enjoy seriously threaten the new entrants. The industry and the products require extensive brand building efforts to create awareness and acceptability. The new players not only have to improve the quality of the wine but also have to have deep pockets to spend heavily on brand building efforts to sustain themselves The good news for the new players is that the distribution channels are open to new players willing to invest long term in the trade.

The threat of substitutes

“A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose”

Substitutes like beer and spirits pose a serious threat to the wine industry, as their market is phenomenally bigger and growing and consumers switch very easily to these alternatives. However the wine producers do not have to worry as the wine industry has grown in the midst of these substitutes and carved a niche for itself with loyal consumers. The wine has an inherent advantage of being the healthier option to the empty calories of spirits and beer.

Rivalry between the existing players

The competition between the existing players has intensified with every one trying to grab the share of small but increasing market though the market growth rates are high it is on the smaller base. The current three big players in coming years will be of similar size and compete with each other. The new entrants are trying to offer better trade discounts to increase volume. There is however a huge possibility that the market consolidation will lead to few large players along with some small players creating product differentiation and co-existing with sustainable market shares.

The need of the market is everybody working together to increase the market by creating awareness and educating the customers about the wine drinking benefits. Big players along with the government should come together to create a regulatory body for controlling the quality and creating awareness programs across the country. Foreign players entering India will pose threat to Indian wineries due to two main weaknesses of Indian players viz, poor quality of wine and low investment.


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Conclusion

The five forces model along with the SWOT analysis (see next page) provide new players insight into the current market dynamics and will help to plan their business strategy to improve their position in the industry. The new players have to influence the five forces in the interest of their businesses and strive hard to reduce the effect of these forces.


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SWOT Analysis of the Market

SuggestionsAs you have noticed that the Indian wine market if growing with phenomenal numbers, the base is smaller. Any new player will have to invest substantially to increase awareness about the wine and its benefits. The wine producers will have to work closely with the Indian government to achieve this cultural change which might seem slow in the beginning.

The top of the line marketing budgets of all new entrants should be high. The new player should invest in creating a strong association for its products and thus create‘pull’ in the market, rather than ‘push’ strategies adopted by the current players.

Strengths

1. Nascent Stage, few players2. Growth rate per annumn 30%3. Urban population increasing

every year4. Good Climate for growing

wine grapes

Weaknesses

1. Poor Quality of wine2. Poor awareness on wine3. Stringent and regressive

government rules with different taxation across various states.

4. High custom duties and levies for foreign players.

Opportunities1. Large domestic market with

increasing disposable income 2. Population changing lifestyle

accepting new trends3. Export Potential to rest of the

world. (Refer page 55)4. Growing Tourism in India

(Refer Annexure #)

Threats

1. New players entering market at fast pace

2. Foreign players entering with tie ups with better quality


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PRICE SEGMENTATION

Price INR Price ($) Varietals BrandsRemarks

<200 < $4.5Poor quality red wines made by small players, Local Varietals. Isabella

Indage's lowest brand Figueira

Poor reds

200-250 $4.5 - $5.5 Local varietiesSula's madera and Indage's vinballet

Bluestar introduced their cheap variant in the name of Evita

250-300 $5.5 - 6.5$ Local varietiesDajeebah's rose, Sailo Red wine

300-350 $6.5 - $8Three good Chenin Blanc by new players in this segment

Indage's largest selling brand Riviera

For whites

350-400 $8 - $9 Largest segment, Cabernet shiraz, SB, Rose

Almost all players have at least 2-3 brands

The most popular price segment, mostly reds

Indage's cheap sparking wine in this segment

Most Grover's wine in this segment

400-450 $9 - $10 Few brandsIndage's malbec and Zin

450-500 $10 - $11 Indage's Dominanceagain mostly whites

Indage's Excellent Shiraz

Grover's La reserva

500+ $11 +Sparkling wines of Indage and Sula

ND had placed its few products here, which did not sell

For sparkling segment

Note: The prices are per bottle of 750 ml, without any local sales tax.


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CONSUMER SEGMENTATION The Indian Market largely can be classified into two Segments

1. Domestic 2. Foreign Tourists

The Domestic1. Urban The Urban population amounts to 48% of the total population in India and the target segment amounts to 1% of the total urban population. E.g the Total Population of Mumbai is 1.5 crsThe Total Urban population is 70 lacs, so the target population is 7 lac. The characteristics of the target urban population

a. Income above Rs.10 lac+ i. Self employed ii. Service class

b. Income between 3 lac to 10 lac (Great Indian Middle Class)

i. Highly educated upwardly mobileii. Small business familiesiii. DINKS

c. Income between 3 – 6 laci. Upper Middle class

2. Rurala. Large farming communityb. Small business classc. Govt. Service class

Foreign

The tourism boom has resulted in 2.5 million of tourist visiting India last year with a projected growth of 15 %.

Embassies in the country also provide good market for Indian wines.

Note: 10 lacs = 1 million


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MARKET PLAYERS AND WINERIESThere are numerous producers small and big across four major wine producing regions in India. There are private individuals spreads out all over the country trying their hand at producing wines in their own back gardens. But the major producers, listed in alphabetical order, are these:

BOSCA (Baramati Grape Industries)

BLUESTAR WINERY

DAJEEBAH WINES (Datacone Wine Industry)

FLAMINGO WINES

GROVER VINEYARDS

INDAGE (Champagne Indage)

N.C. FINE WINES

N.D. WINES

PRATHMESH WINES

PRINCESS (In-Vogue Creations)

PYRAMID WINES

RAJDHEER WINES

RENNAISSANCE WINES

SAILO WINES (V.M. Agrosoft)

SAI KRIPA WINERY

SHAW WALLACE

SULA VINEYARDS (Samant Soma Wines)

VINBROS & CO.

VINICOLA

VINSURA (Sankalp Winery)

#For prices refer the annexures.


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BOSCA Baramati Grape IndustriesAddress: P.O. Pimpali, Tal. Baramati, District Pune, MS, 413 102Capacity: 300,000 litres

Operations from:

Brands/ Varietals

1. Riesling2. Red Wine3. Rosé Wine

Bosca also produce two fortified wine brands

1. Sherry2. Vermouth Torino

BLUESTAR WINERYAddress: Chakan, Pune

Capacity: 150,000 litres

Operations from: 2004

Brands/ Varietals1. Sauvignon Blanc2. Chenin Blanc3. Shiraz

DAJEEBAH WINES (Data cone Winery)Address: 271, Samrajya, Sangliwadi, Sangli, MS, 416416



Brands/Varietals1. Sauvignon Blanc

2. Chenin Blanc

3. Cabernet Sauvignon

4. Shiraz

5. Chardonnay

6. Zinfandel

7. Merlot


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8. Shherly Dry Red Wine

9. Balleee Sweet Red Wine

FLAMINGO WINESAddress: C U 4, MIDC Vinchur, Tal. Niphad, Dist. Nasik, 422 305, M.S

Capacity: 100,000


Brands/Varietals1. Chenin Blanc2. Sauvignon Blanc3. Zinfandel4. Cabernet-Shiraz

GROVER VINEYARDSAddress: Ragunathpura, Dodballapur Taluka, Bangalore District

Capacity: N.A

Operations from:

Brands/Varietals

1. Brut2. Demi-sec Rosé3. Blanc de Blanc4. Shiraz Rosé5. La Reserve Red Wine6. Cabernet-Shiraz7. Sauvignon Blanc8. Viognier-Clairette

INDAGE (Champagne Indage)Address: A/p Narayangaon, Tal. Junner, Dist. Pune, M.S

Capacity: N.A


Brands/ Varietals

EXPORT ONLY

1. Anarkali Red2. Chhabri White3. Omar Khayam BRUT4. Soma Red


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5. Soma White6. Tantra – Arkavati7. Tantra – Baramati (red)8. Tantra – Baramati (blush)

SPARKLING WINE

1. Joie, cuvee close non-vintage. 2. Marquis de Pompadour, Brut. 3. Chateau Indage Ivy Brut

VARIETALS

1. IVY Viognier2. IVY Semillon/Chardonnay3. IVY Shiraz4. IVY Sauvignon/Semillon5. IVY White Zinfandel6. IVY Malbec7. IVY Chenin/Muscat

FEW VINTAGE WINES

1. Chantilli Chardonnay2. Chantilli Cabernet Sauvignon3. Riviera Red Wine4. Riviera White Wine

N.C. FINE WINESAddress: A/p. Nerlie, Tal. Kadegaon, Dist. Sangli



Brands/Varietals

1. Fouray Red Wine

N.D. WINES ( Own labels discontinued since 2005) Address: Pimpalgaon, Wani Road, At Po. Khedgaon, Tal. Dindori, Dist. Nasik,

422205.



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Brands/Varietals

1. N.D. Sauvignon Blanc 2. N.D. Cabernet Sauvignon 3. N.D. Chenin Blanc 4. N.D. Syrah 5. N.D. Cabernet-Syrah 6. N.D. Spaga (Sauvignon Blanc)7. N.D. Spaga (Cabernet Sauvignon)8. Hoor

# ND is providing its entire wine to Sula.

PRATHMESH WINESAddress: Pimpaldar, Tal. Satana, Dist. Nashik, M.S



Brands/Varietals

1. Red Wine (Cabernet Sauviogon)2. White Whine (Chenin Blanc)3. Rosé Wine

PRINCESS (In-Vogue Creations)Address: Taloja, Near Thane, MS



Brands/Varietals

1. Princess White Wine2. Princess Red Wine

PYRAMID WINESAddress: MIDC Area, Plot No. E-200, Baramati, Dist. Pune, M.S



Brands/Varietals

1. Yellow Stone


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RAJDHEER WINESAddress: Bhilwad, Post. Kapsi, Tal. Deola, Dist. Nashik, 423 120, M.S



Brands/Varietals

1. Le Vino Red Wine2. Aurum White Wine

RENNAISSANCE WINES

Address:


Brands/Varietals

SAILO WINES (V.M. Agrosoft)Address: A/p. Pimpalgaon Baswant, Tal. Niphad, Dist. Nashik, 422 209, M.S



Brands/Varietals

1. Et Tu Brutus2. Mark Antony

SAI KRIPA WINERYAddress: Wine Park, Pulose, Sangli, MS



Brands/Varietals

SHAW WALLACEAddress: Reg. Off: Gulab Bhawan, 6 Bahadur Shah Zafar Marg, New Delhi 110

002

Winery is based in Bangalore


Brands/Varietals


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1. Golconda Ruby Wine

SULA VINEYARDS (Samant Soma Wines)

Address: Gat 35/2, Govardhan, Off Gangapur Road, Dist. Nashik, M.S



Brands/Varietals

Sparkling:1. Sula Brut2. Sula Seco

Whites:3. Sauvignon Blanc4. Chenin Blanc 5. Madeira white

Reds:6. Sula Cabernet/Shiraz7. Madeira red

Rosés:8. Blush zinfandel9. Madeira rosé

VINBROS & CO.Address: 23, Romain Rolland Street, Pondicherry


Brands/Varietals

(1) Globus Port Wine(2) Vinbros Red Magic ruby red wine

VINICOLAAddress: 248 Borda, Margao, 403602, Goa


Brands/Varietals


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1. Casal Red – Slightly sparkling red wine2. Casal White – Slightly sparkling white wine3. 28 Carats Red4. 28 Carats White – Sparkling white wine5. Apple Champagne – Sparkling wine made with apple extracts6. Sangria – Slightly sparkling sweet wine7. Conde de Monte Cristo – Dry white wine8. Adega de Velha9. Vino Branco Doce – Sweet white wine10.Vinicola Riesling – Dry white wine, probably not really made with Riesling11.Vinicola Cabernet – Dry red wine, perhaps made from Cabernet12.Vinicola Muscatel – Sweet white, perhaps made from Muscat 13.Vinicola Medallion – Dry white wine14.Vinicola Rose Wine – Sweet, light pink wine15.Vinicola Ruby Wine16.Granjo 17.Colva Brut

VINSURA (Sankalp Winery)Address: A/p Vinchur, Tal. Niphad, Dist. Nashik, M.S.



Brands/Varietals

1. Cabernet Sauvignon2. Zinfandel3. Syrah 4. Sauvignon Blanc5. Chenin Blanc 6. Symphony (local variety)


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OTHER WINERIES

Girana Valley Wine YardA/p. Bhaoor, Tal. Deola, Dist. Nashik, M.S.

Indogrape WineryA/p. Gopalpur, Tal. Pandharpur, Dist. Solapur, M.S.

Kalyani Wines and BeveragesMaya Hospital, Mayni Road, A/p. Vita, Tal. Khanapur, Dist. Sangli, M.S.

Maharaja WineryArogya Vignon Vidyapeeth, A/p. Dhakambe Shivar, Tal. Dindori, Dist. Nashik, M.S.

Mohini WineriesGat No. 321, A/p. Akolekati, Tal. North Solapur, Dist. Solapur, M.S.

Sahayadri Hills Vineyards271 Samrajya, Sangliwadi, Dist. Sangli, 416416, M.S.

Shivprasad WinesKakasaheb Wagnagar, A/p. Ranwad, Tal. Niphad, Dist. Nashik, M.S.

Note: The above list of wineries and its products is not exhaustive.


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KEY IMPORTERSThe total current imports in India amount to 90000 cases from all the importers. This number is growing at over 30% with list of importers increasing every year.

Sonarys Co-Brands Pvt. Ltd.G-12, Creative Industrial Estate, NM Joshi MargMumbai-40001191-22-56669111

Mumbai

Brindco Sales ltd.S-53 Okhla industrial estate, Phase IINew-Delhi-110020# 91-11-51616424

Delhi

Mohan Brothers Delhi

RR International Delhi

Global Tax Free Traders Inc Delhi

Kiara WinesBJ Patel Road, Malad WestMumbai –40006491-22-28827033 / 0743

Mumbai

Fairmacs Shipstores Pvt. Ltd.14, Moore Street, Chennai – 60000191-44-25231383 / 84 / 85

Chennai

Star X wines Delhi

Echidna Wines Mumbai

Please see Annexure 21 for the list of wines imported by Indian importers. Please see Annexure 22 for list of wines imported by Indian Wine Producers


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Section 3

Indian Wine Market Data


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Indian Wine Market Category-wise Annexure 1

VOLUME – CASES

Category 1997 2001-02 2002-03 2003-04 2004-05Premium Wines (still) 40000 120000 172000 209840 272792Sparkling wines 10000 30000 35000 39200 43120Sub Total 50000 150000 207000 249040 315912Cheap and fortified wines 100000 220000 240000 247200 271920TOTAL 150000 370000 447000 496240 587832

Annexure 2

REVENUE (Rs. Crores)

Category 1997 2001-02 2002-03 2003-04 2004-05Premium Wines (still) 16.8 57.6 82.56 105.8 130.9Sparkling wines 6 21.6 25.2 29.2 32.3Sub Total 22.8 79.2 107.7 134.9 163.3Cheap and fortified wines 12 29.04 34.56 35.60 39.16TOTAL 34.8 108.2 142.3 170.5 202.4

REVENUE (USD million)

Category 1997 2001-02 2002-03 2003-04 2004-05Premium Wines (still) 3.7 12.8 18.3 23.5 29.1Sparkling wines 1.3 4.8 5.6 6.5 7.2Sub Total 5.1 17.6 23.9 30.0 36.3Cheap and fortified wines 2.7 6.5 7.7 7.9 8.7TOTAL 7.7 24.1 31.6 37.9 45.0


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Indian Wine Market Category-wise

Annexure 3 Volume Growth

Category 1997-02 2002-03 2003-04 2004-05Premium Wines (still) 200% 43% 22% 30%Sparkling wines 200% 17% 12% 10%Sub Total 200% 38% 20% 27%Cheap and fortified wines 120% 9% 3% 10%TOTAL 147% 21% 11% 18%

Annexure 4

Revenue Growth

Category 1997-02 2002-03 2003-04 2004-05Premium Wines (still) 243% 43% 28% 24%Sparkling wines 260% 17% 16% 11%Sub Total 247% 36% 25% 21%Cheap and fortified wines 142% 19% 3% 10%TOTAL 211% 31% 20% 19%


- 33 -

Indian Wine Market Region-wiseThe Region-wise sales are only for PREMIUM WINES (Still and Sparkling)

Regions

North- Delhi, ChandigarhSouth- Bangalore, Hyderabad, Kerala, GoaWest- MumbaiEast- Calcutta, Guwahati, Orissa

Annexure 5PREMIUM WINES, VOLUME - CASES

Region 1997 2001-02 2002-03 2003-04 2004-05North 14000 40000 56000 67200 86016South 10000 32000 44000 50600 60720West 24000 67000 95000 114000 147060East 3500 11000 15000 16800 19320TOTAL 51500 150000 210000 248600 313116

Annexure 6

PREMIUM WINES, REVENUE- Rs. (CRORES)

Region 1997 2001-02 2002-03 2003-04 2004-05North 7 21 30 38 47South 5 16 23 27 31West 12 35 50 64 81East 2 5 7 9 10TOTAL 25 77 110 137 169

PREMIUM WINES – REVENUE, USD (Million)

Region 1997 2001-02 2002-03 2003-04 2004-05North 1.5 4.7 6.7 8.4 10.6South 1.1 3.6 5.0 5.9 6.9West 2.6 7.7 11.1 14.3 18.0East 0.4 1.2 1.6 1.9 2.2TOTAL 5.5 17.2 24.6 30.6 37.6


- 34 -

Indian Wine Market Region-wise

Annexure 7

PREMIUM WINES, VOLUME- GROWTH

Region 1997-02 2002-03 2003-04 2004-05North 186% 40% 20% 28%South 220% 38% 15% 20%West 179% 42% 20% 29%East 214% 36% 12% 15%TOTAL 191% 40% 18% 26%

Annexure 8

PREMIUM WINES, REVENUE- GROWTH

Region 1997-02 2002-03 2003-04 2004-05North 207% 43% 25% 25%South 236% 41% 18% 16%West 200% 45% 28% 26%East 222% 36% 16% 14%TOTAL 210% 43% 24% 23%


- 35 -

Section 4

Indian Wine Market Forecast 2006-10


- 36 -

CATEGORY SALES PROJECTIONS 2005-2010Annexure 9

VOLUME PROJECTION- CASES

2005-06 2006-07 2007-08 2008-09 2009-10Premium Wines (still) 354630 443287 558542 692592 879591Sparkling wines 47432 52175.2 57393 63132 69445Sub Total 402062 495462 615934 755724 949036Cheap and fortified wines 285516 299792 314781 330520 347046TOTAL 687578 795254 930716 1086244 1296083

Annexure 10

REVENUE PROJECTION– Rs. (CRORES)

2005-06 2006-07 2007-08 2008-09 2009-10Premium Wines(still) 161.7 196.8 254.7 315.8 401.1Sparkling wines 34.2 36.9 41.3 43.9 50.0Sub Total 196 234 296.0 360 451Cheap and fortified wines 41.11 35.98 37.77 39.66 41.65TOTAL 237 270 333 399 492

REVENUE PROJECTION– USD (MILLION)

2005-06 2006-07 2007-08 2008-09 2009-10Premium Wines(still) 35.9 43.7 56.6 70.2 89.1Sparkling wines 7.6 8.2 9.2 9.8 11.1Sub Total 43.5 51.9 65.8 79.9 100.2Cheap and fortified wines 9.1 8.0 8.4 8.8 9.3TOTAL 52.7 59.9 74.2 88.8 109.5


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PROJECTION GROWTHCategory-wise

Annexure 11

PROJECTED VOLUME GROWTH

2005-06 2006-07 2007-08 2008-09 2009-10Premium Wines (still) 30% 25% 26% 24% 27%Sparkling wines 10% 10% 10% 10% 10%Sub Total 27% 23% 24% 23% 26%Cheap and fortified wines 5% 5% 5% 5% 5%TOTAL 17% 16% 17% 17% 19%

Annexure 12

PROJECTED REVENUE GROWTH

2005-06 2006-07 2007-08 2008-09 2009-10Premium Wines (still) 24% 22% 29% 24% 27%Sparkling wines 6% 8% 12% 6% 14%Sub Total 20% 19% 27% 22% 25%Cheap and fortified wines 5% -13% 5% 5% 5%TOTAL 17% 14% 24% 20% 23%


- 38 -

REGION SALES PROJECTIONS 2005-2010Region-wise

Annexure 13

PREMIUM WINES, VOLUME - CASES

Region 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010North 110100 137626 172032 213320 266650South 74078 90376 111162 134506 164097West 191178 238973 298716 367420 459275East 23184 27357 32008 37129 43070TOTAL 398541 494331 613918 752375 933092

Annexure 14

PREMIUM WINES, REVENUE – Rs. (CRORES)

Region 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010North 57 68 85 105 131South 37 43 53 65 79West 96 116 147 176 226East 11 13 15 18 21TOTAL 202 240 300 364 457

PREMIUM WINES, REVENUE – USD (MILLION)

Region 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010North 12.6 15.0 18.8 23.3 29.2South 8.3 9.6 11.9 14.3 17.5West 21.4 25.8 32.7 39.2 50.2East 2.5 2.9 3.4 4.0 4.6TOTAL 44.8 53.4 66.7 80.8 101.5


- 39 -

PROJECTION GROWTHRegion-wise

Annexure 15

PROJECTED VOLUME GROWTH

Region 2005-06 2006-07 2007-08 2008-09 2009-10North 28% 25% 25% 24% 25%South 22% 22% 23% 21% 22%West 30% 25% 25% 23% 25%East 20% 18% 17% 16% 16%TOTAL 27% 24% 24% 23% 24%

Annexure 16

PROJECTED REVENUE GROWTH

Region 2005-06 2006-07 2007-08 2008-09 2009-10North 20% 19% 25% 24% 25%South 21% 16% 23% 21% 22%West 19% 21% 27% 20% 28%East 14% 18% 17% 16% 16%TOTAL 19% 19% 25% 21% 26%


- 40 -

Section 5

Indian Wine Rating


- 41 -

Indian Wine by Varietals Note: The rating of the wines has been conducted according to standard, objective wine evaluation techniques; however, different experts may disagree on the rating of any givenwine. All ratings included in this study are for reference only and should not be relied upon for any contractual purpose. All data should be crosschecked by the interested parties. The authors of this Report will not be responsible for reliance on these ratings/data, which are provided only for reference.The Price is for 750 ml bottle without any taxesThe currency conversion is taken at Rs 45 for 1 USD

Annexure 17

Sauvignon Blanc

Chenin Blanc

Varietal Producer Brand RatingPrice (Rs) Price ($)

Chenin Blanc ND CB Average 378 9Chenin Blanc Sula Sula Average 375 9Chenin Blanc Prathamesh White wine 365 8

Chenin Blanc DajeebahChenin White

wine 355 8Chenin Blanc Vinsura Good 350 8Chenin Blanc Bluestar Bluefolds 330 8Chenin Blanc Flamingo Good 326 8

Chenin Blanc Rajdheer Arum white wine Poor 0

N.A: Not Available

Varietal ProducerBrand RatingPrice $ Price

(Rs.)Sauvignon Blanc ND Spaga Average 13 540Sauvignon Blanc Sula Sula Average 11 490

Sauvignon Blanc ND Sauvignon blanc Good 9 408Sauvignon Blanc Grovers Sauvignon blanc Average 9 400Sauvignon Blanc Flamingo Sauvignon blanc Average 9 397

Sauvignon Blanc Vinsura Sauvignon blanc Good 9 395Sauvignon Blanc Dajeebah Sauvignon blanc Good 8 355Sauvignon Blanc Bluestar Bluefolds Very good 8 330


- 42 -

Cabernet Sauvignon

Varietal Producer Brand RatingPrice (Rs)

Price ($)

Cabernet Sauvignon ND Wines Spaga Average 582 14Cabernet Sauvignon Indage Chantilli Average 385 9Cabernet Sauvignon Prathamesh Red wine Poor 365 8

Cabernet Sauvignon ND Wine CS Good 360 8Cabernet Sauvignon Dajeebah CS Average 305 7

Cabernet Sauvignon Sailo WinesMark Antony -

red Good 257 6

Cabernet Sauvignon RajdheerLa Vino Red

wine Poor NA NA

Zinfandel


Price ($)

Zinfandel Indage Ivy Zinfandel Average 450 10Zinfandel Dajeebah Zinfandel red wine Average 405 9Zinfandel Vinsura Zinfandel Good 400 9

Zinfandel Flamingo Zinfandel Very good 353 8Zinfandel Sula Blush Zinfandel Average 450 10

Rose`


Price ($)

Rose' Prathamesh Rose' Poor 365 8

Rose' Grovers Rose' Poor 360 8Rose' Vinsura Rose' Good 360 8Rose' Dajeebah Rose wine Average 255 6

Rose' Sula Madera Rose Average 205 5


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Indian ‘Reds’ by PriceAnnexure 18

Varietal Producer Brand RatingPrice (Rs.) Price ($)

Cabernet Sauvignon ND Spaga Average 582 14

Shiraz ND Syrah Average 540 13

Cabernet shiraz ND Cabernet Shiraz Good 492 11

Shiraz Indage Ivy Shiraz Excellent 460 11

Cabernet shiraz Grovers La Reserve Good 450 10

Malbec Indage Ivy Malbec Very good 425 10

Zinfandel Dajeebah Zinfandel red wine Average 405 9

Zinfandel Vinsura Zinfandel Good 400 9

Cabernet shiraz Sula Cabernet Shiraz Average 395 9

Cabernet Sauvignon Indage Chantilli Average 385 9

Cabernet shiraz Flamingo Cabernet Shiraz Very good 369 9

Cabernet Sauvignon Prathamesh Red wine Poor 365 8

Cabernet Sauvignon ND CS Good 360 8

Cabernet shiraz Grovers cabernetshiraz Very good 360 8

Shiraz Dajeebah Syrah Red wine Average 355 8

Zinfandel Flamingo Zinfandel Very good 353 8

Shiraz Bluestar Bluefolds Good 350 8

Cabernet Sauvignon Dajeebah Cabernet Sauvignon Average 305 7

Pinot Noir Indage Riviera Red wine Average 300 7

Merlot Dajeebah Merlot Good 275 6

Cabernet Sauvignon Sailo Mark Antony - red Good 257 6

Gamay arkeshyam Indage Vin Ballet Red Wine Poor 230 5

Local Varietal Bluestar Evita Average 220 5

NA Sula Madera Red Average 205 5

Cabernet shiraz Pyramid Wines Yellow Stone Poor 190 4

Isabella Sailo Et tu Brutus-red Average 185 4

Local Varietal Dajeebah Shherly Poor 180 4

Isabella NC fine wines Fouray Poor 175 4

Local Varietal Indage Figueira Red Average 139 3

Local Varietal Dajeebah Balleee Poor 125 3

NA Princess Red Wine Poor 120 3

Bangalore Blue Shaw Wallace Golconda Ruby Wine Poor 0

Cabernet Sauvignon Rajdheer La Vino Red wine Poor 0


- 44 -

Indian ‘Whites’ by PriceAnnexure 19

Varietal Producer Brand RatingPrice (Rs.)

Price ($)

Riesling Indage Rhine Pride 588 14Sauvignon Blanc ND Spaga Average 540 13Sauvignon Blanc Sula Sula Average 490 11

Semillon chardonnay IndageIvy Semillon Chardonnay 490 11

Viognier Indage Ivy Viognier 460 11Semillon sauvignon Indage Ivy Sauvignon Semillon 455 11

Chenin Blanc muscat Indage Ivy Chenin Muscat 455 11Zinfandel Indage Ivy Zinfandel Average 450 10Sauvignon Blanc ND SB Good 408 9

Chardonnay DajeebahChardonnay White

wine 405 9Sauvignon Blanc Grovers Sauvignon blanc Average 400 9na Vinsura Flora 400 9Sauvignon Blanc Flamingo Average 397 9

Sauvignon Blanc Vinsura Good 395 9Chardonnay Indage Chantilli Chanrdonnay Average 385 9Chenin Blanc ND CB Average 378 9

Chenin Blanc Sula Sula Average 375 9Chenin Blanc Prathamesh White wine 365 8Clairette Grovers Blanc de blanc 360 8

Viognier clairette Grovers Viognier clairette Good 360 8Sauvignon Blanc Dajeebah Sauvignon blanc 355 8Chenin Blanc Dajeebah Chenin White wine 355 8

Chenin Blanc Vinsura Good 350 8Chenin / sauvignon ND Hoor Good 340 8

Sauvignon Blanc Bluestar BluefoldsVery good 330 8

Chenin Blanc Bluestar Bluefolds 330 8

Chenin Blanc Flamingo Good 326 8Ugni Blanc chardonnay Indage Riviera White wine Average 320 7Ugni Blanc akravati Indage Vin Ballet White Wine Average 230 5

NA Sula Madera White Average 205 5Princess White Wine Poor 150 3

Local Varietal Indage Figueira White 139 3

Chenin Blanc Rajdheer Arum white wine 0


- 45 -

Indian ‘Sparkling’ by price

Annexure 20

Varietal Producer Brand RatingPrice (Rs.)

Price ($)

Pinot Noir, ugni blanc chardonnay Indage

Marquis de Pompadour Good 720 17

Chenin Blanc, Riesling chardonnay Indage Ivy brut 2004 Average 550 13

Local Varietal Sula Sula BrutVery good 550 13

Local Varietal Sula Sula Seco Average 395 9Grenache ugni blanc Indage Joie, cuvee close Average 370 9


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BIO wines (Indian importers)Annexure 21

BRINDCO

Country Winery/ProducerSouth Africa

Rupert and Rothschild

Mulder Bosch Vineyards

ChileVina Tarapaca

Baron Philippe De Rothschild

Clina Estates

AustraliaMc Williams

Leeuwin Estate

D'Arenburg Winery

Clarendon Hills

Wolf Blass Winery

Chinkara Winery

New Zealand Montana

USAKendall Jackson

Sequoia Group

St. Francis Winery

Benziger Vineyards

Jordan Wines

Clos Pecase Winery

Joseph Phelps Vineyards

Cakebread Cellars

Duck Horn Vineyards

Caymus Vineyards

Stag's Leap Wine Cellars

Dominus

Wine Group

Spain Codorniu

ItalyZonin

Tasca D' Almerita


- 47 -

Allegrini

Marchesi De Frescobaldi

Marchesi Di Barolo

Tenuta Dell' Ornellaia

Gaja Winery

France

Henri Bourgeois

Chateau De Ampuis

Delas

Maison Louis Jadot

Sonarys

Country Winery/ProducerAustralia CasellaAustralia J&F LurtonAustralia LindermansAustralia PenfoldsAustralia RosemountAustralia SeppeltCalifornia ArrowoodCalifornia Clos Du valCalifornia Robert MondaviChile Calitera ArboledaChile MontesFrance Georges DuboeufFrance Allegrini Estate WineryFrance Domaine La ChevaliereFrance FaiveleyFrance Hugel Et FilsFrance Louis RoedererFrance Pascal JolivetFrance Paul Jaboulet AineFrance SauvionFrance TaittingerHungary Tokaj HetszoloItaly AntinoriItaly BisolItaly CarpinetoItaly UmbertoCesariItaly Col D'orcia


- 48 -

Italy GajaItaly MantellassiItaly Michele Chiarlo'sItaly PighinItaly PrunottoItaly Tenuta San GuidoItaly TormarescaItaly TortiItaly Villa GirardiItaly GarofoliNew Zealand Villa MariaPotugal Dow'sSouth Africa Spring Field EstateSpain EnateSpain Bodegas PalacioSpain Marques De Murrieta

Kiara Wines Country Winery/producerItaly

Cantina TudernumBeni Di BatasioloGerardo Cesari SpaCasa V L ChecchiAzi. Agri. Lorenzon

France Jean Claude FabrisRomania Halewood RomaniaHungary SzigetvinArgentina Santa AnaChile Luis Fellipe EdwardsAustralia Tandou Wines


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BIO / Bulk (Indian Wine Producers)

Annexure 22

Note: The rating of the wines has been conducted according to standard, objective wineevaluation techniques; however, different experts may disagree on the rating of any given wine.All ratings included in this study are for reference only and should not be relied upon for anycontractual purpose. All data should be crosschecked by the interested parties. The authors ofthis Report will not be responsible for reliance on these ratings/data, which are provided only forreference.

Indage

Varietals Country Winery Brand Rating PriceShiraz Australia Cranswick Cranswick Indage Shiraz Good 500

Merlot Australia Cranswick Cranswick Indage Merlot Good 475

Chardonnay Australia Cranswick Cranswick Indage Chardonnay Good 475

Pinot Noir South Africa Nelson Creek Zulu Nelson's Creek Good 450

Cabernet,Merlot France Taillan Vin de pays d'oc Good 470

Riesling Germany Peter Mertes Perter Mertes Indage Rhine Poor 450

Cabernet Sauvignon Chile Morande Morande Indage Cab Sav Good 588

Sauvignon Blanc Chile Morande Morande Indage Sau Blanc Good 588

Pinot Noir Zulu Pinotage Average 588

Sula “Reds”

Varietals Country Winery BrandMerlot Malbec Argentina Trapiche Astita Merlot Malbec

Tempranillo Argentina Trapiche Astita Tempranillo

Cabernet Merlot Australia Hardy's Stamp Series

Shiraz Cabernet Australia Hardy's Stamp Series

Merlot Chile Santa Rita 120 Merlot

Cabernet Sauvignon France Fortant De France Cab Sauv

Merlot France Fortant De France Merlot

Shiraz France Fortant De France Shiraz

Merlot Cabernet France Michel Lynch Michel Lynch Bordeaux Rouge

Sangiovese Italy Ruffino Aziano Chianti Classico

Sangiovese Italy Ruffino Riserva Ducale Chianti

NA Italy Ruffino Chianti Ruffino

Sangiovese, Cabernet, Merlot Italy Ruffino Modus Toscana

NA Italy Ruffino TENUTA GREPPONE MAZZI


- 50 -

Shiraz South Africa Distell Two Oceans

Pinot noir South Africa Distell Two Oceans

NA Spain Marqués de CáceresRioja Red


- 51 -

Sula “Whites”

Varietals Country Winery/Producer BrandSauvignon Blanc Semillion Argentina Trapiche Astita Sauvignon Semillion

Torrontes Argentina Trapiche Astita Torrontes

Chardonnay Australia Hardy's Nottage hill Chardonnay

Chardonnay Semillion Australia Hardy's Stamp Series

Reisling Gewurztraminer Australia Hardy's Stamp Series

Chardonnay Chile Santa Rita 120 Chardonnay

Sauvignon Blanc France Fortant De France Sauvignon Blanc

Chardonnay France Fortant De France Chardonnay

Sauvignon Semillion France Michel Lynch Michel Lynch Bordeaux Blanc

Orvieto Italy Ruffino Orvieto Secco

Chardonnay Italy Ruffino Libaio Chardonnay Toscana I.G.T.

Sauvignon Blanc New Zealand Nobilo Marlborough Sauvignon Blanc

Chardonnay South Africa Distell Two Oceans

Sauvignon blanc South Africa Distell Two Oceans

NA Spain Marqués de Cáceres Rioja white

Sula “Sparkling”

Varietals Country Winery/Producer BrandPinot noir, chardonnay France Taittinger Taittinger Brut ReserveNA France Taittinger Taittinger Comtes de Champagne Blanc de BlancsSauvignon, Muscadel South Africa J.C. Le Roux Le Domaine


- 52 -

Section 6

Key information for new players


- 53 -

TAXES AND DUTY STRUCTUREWine Imports (BIO WINES)

For importing wines no licence is required one can import wine into a Customs Bonded Warehouse; thereafter, goods can move either duty free (against a licence from hotels) or duty paid to licence holders after paying the relevant customs duties.

Import duties* 03-04Duties on wines at present are

CIF Value (US$/Case) <$25 $25 - $40 > $40Basic Customs duty 100% 100% 100%Additional Duty 75% 50% or $37/case 20% or $40/case

Countervailing duty 4.5% 4.5% 4.5%Minimum effective duty

350% 210% 190%

Landing Cost Calculation (All Costs in US$ per case of 9 Litre)

Wine & Beer

Cost < 25>= 25 < 40

Remarks>= 40

Remarks

CIF 25 40 50

Add Basic 100% 25 40 50

Sub Total 50 80 100

Add Additional Duty 37.5 40The additional duty for wines costing above US$ 25 but less US$ 40 per case is 50%

40

The rate of additional duty is 20% subject to a minimum of US$ 40

Sub Total 87.5 120 140

Countervailing Duty 4% 3.5 4.8 5.6

Landed Cost per case 91 124.8 145.6

The above information may change as per the government rules

CIF - means that the seller delivers when the goods pass the ship’s rail in port of shipment.


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OTHER FEES/DUTIES APPLICABLE TO WINEDistillery/Brewery License Fee Bottling feeLitterage feeAssessment FeeFranchise FeePermit FeeGallon age FeeRaw Material ExciseAvailability FeeBrand/Label FeePermit FeeTransportation FeeImport Pass FeeExport Pass FeeEducational/Welfare CessVend Fee (Rs.2 / litre)Sales Tax/Surcharge (approx 20%, varies in each state)License FeeToll TaxTOT (full form)

Source: Centre for civil society

Maharashtra’s grape policy 2001 (source MIDC)

Accordingly, to give impetus to the grape processing and wine industry in the state, preparation of a separate policy was under active consideration of the State Government.1. Declaration as a Preferential Area:As the Winery industry does not fall in the preferential area of granting loans, the financial institution like NABARD does not grant loans in such industries. Therefore, to get the high price of the product for farmers and to create better employment in the state, NABARD may be requested to declare preferential area for Winery Industries, enabling to grant such requisite loans.

2. Declaration as a Small Scale Industry:Within the limits of investments prescribed for the Small Scale Industry, wineries should be considered as a Small Scale Industry.

3. Concessions in Excise Duty:For those wine industries whose production has been started before 19th September, 2001, the excise duty will be charged at the rate of 50 per cent of the production expenditure incurred by such units instead of present 100 per cent rate. For those wine industries whose production have been started or would be started on or after 19th September, 2001, the excise duty will be charged at the rate of 25 per cent of the production expenditure incurred by such units. Such concessions will be admissible for period of 5 years.


- 55 -

4. Concessions in Sales Tax:It has been decided with the consent of all states in the country that the floor rate of Sales Tax on liquor will be at the rate of 20 per cent. However, the Wine Process is totally different from the Liquor Production Process and wine unit is considered as agriculture process unit by the Central Government. Therefore, to encourage the Grapes Processing Industry in the state, a request will be made to the Empowered Committee of Finance Ministers of all states constituted by the Government of India to reduce the floor rate of Sales Tax on wine.

5. Wine Sales License:Wine will be permitted for sale by Beer Bars and also licenses will be given to Wine Bars to sell wine on the basis of Beer Bars.

6. Wine Sales License Fee:An amount of Rs. 5000/- per year will be charged for License Fee for the sale of wine and this rate will not be changed for next 10 years.

7. Simplification in the system of License/Permission for Wine Production:If Wine production is taken in Winery Park as declared by the State Government, WineProduct License will be given at district level at the time of allotment of Plot. In other places for Wine Production, by simplifying the system of License the Collector of the district level will be empowered with a binding condition to issue licenses within 30 days.

8. Establishment of Wine Institute:To maintain the quality of Wine at the International Level and to make available trained manpower, a separate Wine Institute will be established. For setting up of the Wine Institute, Government/ MIDC will allot the plot at the nominal rate as given to the other educational institute. Such Institute will look after the work of training, checking the quality of wine, research and information centre for the Wine Industry. These institutes will be established by forming separate trust firstly at Sangli and Nashik. For this purpose, by choosing appropriate alternative from the following alternatives, training institutes will be established:-a) To help the existing trust for formation of training centre.b) To establish training institute in joint venture with the existing trust.c) To establish training institute by creating a separate trust.

9. One Window System:For Winery Industry, essential license, plot, electricity supply, telephone etc. infrastructure will be made available with One Window System.

10. Establishment of Grapes Board:A Grape Processing Industry Board would be established for Wine and other GrapeProcessing Industry in Maharashtra. The Board will consist of representatives from the concerned industry, Grapes producing farmers, State Government, government laboratories, wine institute etc. The organisation and functions of similar kinds of Boards existing in other countries will be examined before establishment of Grape


- 56 -

Board in Maharashtra on same standards. The jurisdiction of the said Grapes Boardwill be as under:a) To inspect and control the Quality of Grape Cultivation and Wine Production.b) To give approval to Labels.c) To inspect Quality and Standard Norms.d) To draft various Schemes for Sale of Processed Grape Products on the Global Level.

11 Facilities of Food Processing Industries:The facilities which are given to the food processing industry units, will be given to theWinery Product Units by giving them the status of Food Processing Units.

12 Wine Product Units - Permission for the Tourists:In foreign countries, permission is given to watch the Wine Product Units. In similar manner, in Maharashtra also, permission will be given to the tourists to visit Wine Product Units for testing the wine. Also, licenses will be given to such Wine Product Units to sale wine on retail basis.

Taxation on Imported Wine:

a) Excise Duty in Maharashtra is 101.25 per litre for BIO products. Per bottle the duty is approx Rs.77.

b) Fees on Labels and Brand: Maharashtra registration fees are Rs.10000 for a brand and Rs.7500 for each label subsequently.

14. Grapes Processing Industry - Easiness in the control of Excise Duty Dept.:To simplify the procedure in the collection of excise duty and for creating easiness in the control of Excise Dept., a committee would be constituted under the Chairmanship ofPrincipal Secretary (Excise) as under:-1. Principal Secretary (Excise), Home Dept. Chairman2. Secretary (Industries) Member3. Secretary (Agriculture) Member4. Development Commissioner (Industries) Member5. Representative of Winery Product Units Member6. Managing Director, MTDC Member7. Commissioner (Excise Dept.) Member Secretary(Source: website of midcindia.com)


- 57 -

US wine import summaryTotal US wine market 680 mn gallons= 280mn casesUS import 25% of its wine requirement. US import approx 175 mn gallons = 73 mn cases

1995 and then 2000 saw a huge increases in the market:One of the Major reason – Media reports on “Benefits of Wine on Health”

The top wine importers to US 1. Italy- 60 mn gallons = 24 mn cases2. Australia 50 mn gallons = 20 mn cases3. France

Top Varietals - Chardonnay- Sauvignon Blanc- Zinfandel

Imported Wine Sale in US Price range: $6-$7

Few tips for exporters to USTarget small wholesalersEuro and Aust. Dollar rising a good sign for Indians for price

competitiveness.

US Wine Consumption characteristics

1. 35% of adult population drink wine2. 40% of the wine drinking population drinks more than a bottle per month. 3. Wine drinking association: relaxing, romantic, intimate, to be consumed

during social gatherings and special occasions. However many people drink wine to complement the food, unwind and relax!

4. Americans have limited knowledge when selecting a good wine and are most comfortable with wines they already know!

5. Los Alamos is Top County for wine consumption.


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Canada’s wine import summaryTotal wine market Canada: 30 mn casesImported wine: 65% = 20 mn cases

Four largest wine markets in Canada

QuebecOntario

65% or 2/3rd of wine market

Columbia 15Alberta 20

Largest exporters to Canada1. France2. US – approx 20% share

One of the challenges facing exporters of wine to Canada is the wine distribution system, which differs in each of the 12 Canadian provinces. Each province has a liquor control board, and these boards are the only entities that can legally import wine into Canada. In most provinces, these liquor authorities manage retail stores and license agency stores. An exception is the province of Alberta, which, in 1993, privatized all liquor retailing. The Alberta Liquor Control Board continues to act as the importer and wholesaler of wine.

Exporters interested in the Canadian wine market should contact the liquor board in the provinces they are targeting for a list of registered agents. A list of provincial and territorial liquor boards may be requested from the U.S. agricultural office in Ottawa.

Kathleen Wainio is the U.S. agricultural attache at the U.S. Embassy in Ottawa, Canada. Tel.: (613) 238-5335, ext. 267; Fax: (613) 233-8511; E-mail: [email protected]


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Foreign tourists in India

Annexure 23

Foreign Tourists visiting India

Year Numbers in mln % Change1995 2.12000 2.65 6.72001 2.54 -12002 2.38 -62003 2.75 15.32004 3.16 15

Annexure 24

Foreign Tourists visiting India projections

Year Numbers in Mln % Change2005 3.67 162006 4.29 172007 5.11 192008 6.13 202009 7.48 222010 9.35 25


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ContactMr. Sameer Bagul DirectorDSM Marketing Pvt. Ltd. 401, Pushpagriha16th Road, Bandra WestMumbai 400050# [email protected]

Mr. Aakash Singh RathoreDirectorDSM Marketing Pvt, Ltd.#[email protected]

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The information about the products, companies published in this report are provided by DSM marketing on the basis of the information received from the product manufacturers, secondary reports, published articles in media and is on an "as is where is" basis.With respect to all information contained in this report, DSM Marketing Pvt. Ltd., and its directors, officers, agents, or employees make no warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, or assume any legal liability or responsibility for the accuracy, completeness, or usefulness of any information contained therein. DSM Marketing does not warrant that the information or services of the Report will meet any specific requirements; nor will it be error-free or uninterrupted; nor shall DSM Marketing be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use, operation, or inability to use this Report. Under no circumstances will DSM Marketing and/or its affiliates or associates or of its third-party information providers be liable for any loss or damage caused by anyone’s reliance on information contained in this report.

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Table of Contents..................................................................................................2SUMMARY ...........................................................................................................4HISTORY..............................................................................................................5CURRENT SCENARIO.........................................................................................6CATEGORIES ......................................................................................................7WINE GRAPE REGIONS IN INDIA ......................................................................8MARKET SIZE 2005 ...........................................................................................11MARKET SHARE................................................................................................12SWOT Analysis of the Market .............................................................................17PRICE SEGMENTATION ...................................................................................18CONSUMER SEGMENTATION .........................................................................19MARKET PLAYERS AND WINERIES ................................................................20

BOSCA Baramati Grape Industries .................................................................21BLUESTAR WINERY ......................................................................................21DAJEEBAH WINES (Data cone Winery).........................................................21FLAMINGO WINES.........................................................................................22GROVER VINEYARDS ...................................................................................22INDAGE (Champagne Indage)........................................................................22N.C. FINE WINES ...........................................................................................23N.D. WINES ( Own labels discontinued since 2005) .......................................23PRATHMESH WINES .....................................................................................24PRINCESS (In-Vogue Creations)....................................................................24PYRAMID WINES ...........................................................................................24RAJDHEER WINES ........................................................................................25SAI KRIPA WINERY .......................................................................................25SHAW WALLACE ...........................................................................................25VINBROS & CO. .............................................................................................26VINICOLA .......................................................................................................26VINSURA (Sankalp Winery) ............................................................................27OTHER WINERIES .........................................................................................28

KEY IMPORTERS ..............................................................................................29Annexure 1......................................................................................................31Annexure 2......................................................................................................31Annexure 3......................................................................................................32Annexure 4......................................................................................................32Annexure 5......................................................................................................33Annexure 6......................................................................................................33Annexure 7......................................................................................................34Annexure 8......................................................................................................34Annexure 9......................................................................................................36Annexure 10....................................................................................................36Annexure 11....................................................................................................37Annexure 12....................................................................................................37Annexure 13....................................................................................................38Annexure 14....................................................................................................38


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Annexure 15....................................................................................................39Annexure 16....................................................................................................39Annexure 17....................................................................................................41

Sauvignon Blanc..........................................................................................41Chenin Blanc ...............................................................................................41Cabernet Sauvignon ....................................................................................42Zinfandel ......................................................................................................42Rose` ...........................................................................................................42

Annexure 18....................................................................................................43Annexure 19....................................................................................................44Annexure 20....................................................................................................45Annexure 21....................................................................................................46Annexure 22....................................................................................................49Annexure 23....................................................................................................59

Annexure 24…………………………………………………………………………57Contact ...............................................................................................................60

Indian Wine Industry Report

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