Wine matters and money

As I’ve said before, wine is a low-alcohol beverage that’s farmer-friendly and good for health.

Wine consumption in India should by now have jumped to at least 50 million cases (450 million litres) — and that’s still only 0.33 litre per capita of the total population, as against 1.2 litres/capita in China (1,700 million litres in 2017), the only country of comparable size.

Instead, wine consumption here is stuck at about 4.5 million cases (40 million litres) — and that’s generously including all the “port-style” and “ad-mix” wines produced in Goa, Maharashtra and Karnataka using table grapes.

So, what ails the wine industry in India?

Briefly, high prices and excessive regulation of wines — which are painted with the same brush as spirits, both of which drive consumers to lower-priced beverages.

Imported wines: They suffer both a 162 per cent customs duty as well as state excise duties (by other names, since items that have already suffered customs should not be taxed again), so retail prices here are two-three times higher for the same wines than overseas.

Then again, the lead-time for supply of imported wines has doubled to two months because FSSAI (Food Safety and Standards Authority of India) has mandated a back label printed with the licence number — so importers can no longer pick up wines ex-stock. Too, two bottles from each batch of wines imported need to be submitted to approved laboratories for testing. Can you imagine the cost of this for Grand Cru wines? Another reason why few top wines are available in India.

Domestic wines face multiple challenges.

Wine grapes: Producing a decent wine requires good-quality wine grapes, and the only way to get really good grapes is to set up your own vineyard. However, since ownership of agricultural land in the only two states that have a wine policy (Maharashtra and Karnataka) is restricted to farmers and “sons of the soil”, wineries have to depend on independent grape growers or enter into leasing or managing of third-party facilities — which inhibits investment.

Winery licences: New licences are being issued only in Maharashtra and Karnataka — and that, too, on sufferance of substantial fees and payment of bribes all round. Moreover, if wineries are not located amidst a vineyard (which encourages wine tourism) because of land-purchase constraints, they lose out both on getting quality grapes as well as revenue from visitors.

Wine label registration: All labels need to be registered annually in each state after submitting multiple physical documents and payment of label registration fees that vary from Rs 5,000 to Rs  25,000 — a meaningless exercise in bureaucratic paper-pushing. High time that excise departments went online and used the internet to speed up things and cut down discretionary powers.

Wine sales: Wines need to reach consumers through either retail outlets or bars and restaurants — whose licensing is again regulated and controlled by state excise. Recognising this, the progressive 2008 Karnataka Wine Policy had opened up licensing for wine taverns (fees: Rs 5,000 annually) and wine boutiques (fees: Rs 1,000 annually). While a number of licences were issued, I am told that the current bribe for each now varies between Rs 0.15 million and Rs 0.5 million!

All of which pushes up the cost of the end-product — now you know why wine consumption in India has languished.

Wines I’ve been drinking: A Spanish 2013 Rioja Roda Reserva from the Bodegas Roda (89 points WS, Rs 6,215 in Bengaluru) — very expressive nose (liquorice, leather, black tea, coffee) and body. But Wine Searcher prices it at an average Rs 1,973 ex-tax internationally. See what I mean!

Cheers.

Alok Chandra is a Bengaluru-based wine consultant