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Indian wine consumption

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  • 1. Soma & Surahi Wine & the Bottle …& The Indian San Fernando, Chile ,14 July Paradox
  • 2. Wine and Indian Mythology • Gods (Devas) consumed wine as their royal drink of choice. • Asuras The dark contemporaries (Demons) literal translation (One Who doesn’t consume wine) • Wine has been compared to Amrit & elaborated in the story of Samudra Manthan where divine treasures were distributed between the gods and demons after a prolonged battle. • The ninth chapter of Rig Veda devotes 114 verses in praise of Soma- Wine, considered to be the ‘elixir of immortality’. • In the practice of Yogic meditation too, Soma, the nectar of life was considered to bring about a higher consciousness.
  • 3. Demographics Republic of India Location: South of Asia , between Arabian Sea and Bay of Bengal Geography Borders : Pakistán, China, Nepal, Bangladesh, Bhutan and Myanmar. AREA: 3.3 million square kilometres CAPITAL: New Delhi (Pop. 16 million) Demography POPULATION: 1.18 billion; 28.9% Urban & 71.1% Rural DENSITY : 343 habitants per square kilómetres LIFE EXPECTANCY : 66.06 years (2009). FORM OF GOVT.: Federal Republic; 28 States & 7 Union Territories. Government PRESIDENT: Pratibha Patil PRIME MINISTER: Manmohan Singh
  • 4. Wine Demographics • Young Nation – Over half of the current population is under 30 years age. • During the next 15 years it will add heavily to the potential wine drinkers. • Growing middle class expected to be 584 million according to a study by McKinsey & Co. • 94 million of this population will enjoy a higher purchase power owing to the influx of MNCs. • Increasing number of women consuming wine. • Growing social acceptance of wine in traditional events.
  • 5. The Challenges of Modern Times Challenges of the Indian Constitution 1. India is a federal constitutional republic consisting Trade Barriers of 28 states and 7 union territories with a parliamentary system of democracy. 1. Cumbersome procedures: Any 2. Each State can formulate its own policy and taxes technical lacunas and one could be under Article 47 of the Indian Constitution. prosecuted and jailed. 3. Article 47 says- …among its primary duties and, in particular, the State shall endeavour to bring 2. Complicated license and registration about prohibition of the consumption except for procedures that can cause too many medicinal purposes of intoxicating drinks and of delays. drugs which are injurious to health. 3. De-bonding after a year- no recourse to send the material back Warehousing Challenges 4. Transfer Permits-time consuming 5. Each State of India formulates its own 1. Most public bonds not temperature controlled procedures. 2. Many private bonds work with air conditioning but 6. Dealing with 33 countries to sell. switch of air con at night to save money 7. Complicated licensing and registration 3. Transportation is through non cooled trucks procedures. 4. Storage at the importer’s end not always proper 8. Prohibition in two states – Gujarat and 5. Storage at the retail shops mostly very poor though Mizoram. now the big stores have become air-conditioned.
  • 6. Challenges (Contd.)…... Duty Structure Customs Duty (Federal) 150% on Assessable Value, CIF value+1% =151% Additional Duty (Refundable): 4% on the total value=10% Hotels & Restaurants – Nil , subject to conditions Excise Duty: Varies in each state VAT- Generally 20% but some states have lower while others are higher. Average=20% Delhi: 20-30% of MRP-Max. Retail Price appx.= customs duty or more Mumbai : Slab rates- varies from appx. Rs.225-500, avg=Rs.300 a bottle Bangalore : Approx. Rs. 225 a bottle Related Links :- Delhi : http://www.indianwineacademy.com/item_6_313.aspx Mumbai : http://www.indianwineacademy.com/item_2_318.aspx Bangalore : http://www.indianwineacademy.com/item_1_253.aspx 1 USD = 47.00 INR
  • 7. Wine Vs. Whiskey etc. Wine 1.5 Whiskey 150 Country Liquor 200 Beer 140 Million Cases Per Annum
  • 8. Evolution of the Imported bottled wines • Imports of Wine Restricted till 2001. Govt. liberated import policy in the same year • Hotels & Restaurants allowed Duty Free Exemption in 2002 • Bulk wines were imported earlier from Australia, South Africa and Chile • Import of Bulk wine allowed but not economical due to heavy taxes • The Market has grown by 20 - 25% in the last 5 years (Except 2009). It is expected to grow annually by 20-25% in the next 5 years. Evolution of wine imports in India. (Period 2004/2008, Values in USD thousand) Code Item 2004 2005 2006 2007 2008 220421 Bottled Wine 5,470.50 8,100.50 9,135.60 13,169.70 11,224.60 220410 Sparkling Wine 1,225.00 2,250.00 5,500.00 6,240.50 5,643.90 220429 Bulk Wine 635.00 789.20 846.60 2,144.00 1,669.60 Total 7,330.50 11,139.70 15,482.20 21,554.20 18,538.10 Annual % change - General 52.00 39.00 39.20 -13.90 Annual % change - Bottled 48.10 12.80 44.10 -14.70
  • 9. Competition of imported bottled wine • Approximate Imports 200,000 cases (2009). • French 40% • Australia & Italy 12-14% each • Chile & USA 8-10 % each • Others 15-20 % (Argentina, Spain, South Africa, New Zealand, Germany, Austria, Portugal etc.) • Price Range : • Majority Wines at low end price range ( Less than US$3) Desired Retail Price around Rs. 1000 • Reasonable Market Between $3 - $5 Psychological Barrier Rs. 1500 • Desired Level for Restaurants $3 - $9 • The sale of premium wines more than $12 is very limited. • $51 to $500 also sell, though share less than 1% . • High Duties / High Hotel Margins are the restrictive factors.
  • 10. Distribution Channels • Any individual, firm or company can import • Bonded Warehouses Essential for Importers • Private / Public Bonded Warehouses Allowed • Excise Bonded warehouse mandatory for sales. Handled by importer / wholesaler / distributor • Importers not allowed direct retail • Retailers must buy from licensed wholesalers • Retails allowed through License only
  • 11. Perception of Chilean wines. • Value for Money wine • Available more easily in Retail • Sparkling Wines have little presence • People don’t know much about the Carmenere, though they like the wine • Sauvignon Blancs are highly appreciated • Chardonnays are considered too Oaky • Some Popular Brands : Frontera, Casillero del Diablo, Anakena, Tarapaca, Caliterra, San Medin, Valdivieso, Baron de Rothschild, Errazuriz, Montes, Casa Lapostolle, Santa Digna , Santa Carolina
  • 12. Recommendations The Principle of the 5 P’s 1. Price – Focus on Low Price But not quality 2. Passion for India 3. Partnership – Marketing Equity and Long Term Approach 4. Personal Appearance – Regular Visits of Wine Makers / Owners Required 5. Participation in Wine Shows, Festivals and Competitions 6. THE SIXTH SENSE – Protect your payments 7. Selecting the Right Importer - Critical and Difficult.
  • 13. For further information visit www.indianwineacademy.com www.delwine.com Acknowledgements : Mr. Nestor Riveros , Minister Counsellor Commercial – PROCHILE, New Delhi Mr. Suprio Bose , Commercial Advisor – PROCHILE, New Delhi, India. Conclusion Indian market is growing fast including imports. But it is a long term, difficult market with good results expected, especially for the Chilean wines because of the good price-quality ratio. Good luck. Buena Suerte!

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