The wine market could finally look up this year.
As you read this, you are either nursing the effects of the morning after, or making a wan attempt at implementing those New Year Resolutions so rashly bandied about the night before. Either way, all are looking into the year ahead with a mixture of hope, anticipation, and trepidation — depending upon age, circumstance, and prospects.
This, then, is an appropriate time to look at the prospects of Indian wines. But first, a look at ‘The Ghost of the Christmas Past’: It’s an unfortunate truism that ‘to make a small fortune in wine, start with a large fortune’. Indage has gone bust, Grover is gamely struggling back, and only Sula is making any money — and not a great deal at that. None of the other 70-odd wineries established in Maharashtra and Karnataka following their respective ‘Grape Processing Policies’ (ah, the politically correct euphemism) is out of the red — indeed, some in Maharashtra are even selling off plant and machinery.
The fate of the many importers is better only because many combine wines with spirits and so have a larger footprint — a ‘wine only’ play is a tough call.
Witness pioneer Sonarys (at one time the market leader) whose wine sales have declined drastically, while companies like Brindco, Aspri and Mohan Brothers are riding high.
All that was the impact of the ‘triple whammy’ I wrote about a year back: dipping demand due to the global meltdown, increased taxes (and prices) and a sharply-declining foreign exchange rate. Things recovered only by the year-end, and overall wine sales in 2010-11 should end at about 1.5 million cases — some 25 per cent higher than the previous fiscal.
However, things are looking distinctively better in 2011.
For one, the slowdown has receded and spending on discretionary items is back along with consumer confidence. Many corporate res-trictions are sure to be lifted in the new fiscal — a major beneficiary will be the hospitality and beverages industries.
Second, should Maharashtra bring in the long-promised reduction of taxes on wines from outside the state — Karnataka has promised to follow suit — this will mean lower consumer prices, which will boost sales volumes in both states and have positive spin-offs elsewhere.
Lastly, the Indian economy is doing well, with 8.5-9 per cent growth projected for 2011-12. And we may well see a small reduction in customs duty on wines (150 per cent at present), which will overcome the impact of a strengthening dollar during the year.
Overall, I expect a growth of 30 per cent, to nearly 2 million cases, with better-quality wines being available at lower prices.
Wines I’ve been drinking:
The chilly weather (even in Bangalore) calls for reds — my libation was a Grover La Reserve 2008, quaffed in its new Barrel Room (actually a basement) during a recent visit. The wine is an old favourite, whose quality had suffered some years ago, but now it seems to be back on track. A Cabernet Shiraz blend with a deep, dark red colour has a rich aroma of fruit, berries, spice and vanilla, and a full-bodied taste with smooth tannins and a good long finish.
With warm wishes for a terrific 2011 to all.
(Alok Chandra is a Bangalore-based wine consultant)
