Indians sell wine to ... France

[Sourav]

Indians sell wine to ... France

In what is being seen as an unusual move - and a coup in business circles - an Indian winegrower has bagged an order to export four containers, or nearly 50,000 bottles, of wine, to France.

The order may seem miniscule, but it has lifted the spirits at Grover Vineyards, the company in the news and one of India's pioneering wine companies

"It is just the beginning," asserts Kapil Grover, a director of the company. "This order is a recognition of the fine quality of wine we produce through a painstaking process." Grover Vineyards says the vineyard grows a quality French variety of grape, Vitis Vinifera, at Bangalore, the capital of the southern state of Karnataka.

In its efforts to produce quality wines, Grover Vineyards has secured the services of Michel Rolland, an expert and world-renowned oenologue. Grover has also tied up with French champagne house Veuve Cliquot for technical support.

Grover's export breakthrough comes at a time when the Indian wine market as a whole is poised for a take-off. Increasing numbers of urban Indians are eschewing traditional heavy liquors such as whisky, believing that wines are healthier. Apart from reasons of health, it is also becoming fashionable to serve and drink wine.

Although the Indian wine industry can be traced back several centuries - in the 17th Century, European visitors to the court of the Grand Moghul Shah Jahan, the builder of the Taj Mahal, would have had the opportunity to enjoy Indian wines - it is only in the past decade or so that locally produced wines have gained more popular appeal. The market has been growing at an average of 30 percent per annum in the past couple of years. Most producers say that they sell what they produce.

Apart from Grover Vineyards, other big producers are Champagne Indage Ltd and Sula Vineyards. The size of the local market for wines is about 400,000 cases (of each 12 bottles each) and the popular brands are Riviera, Chantilli and Marquise de Pompadour from the Indage wineries and Rose-Dry and La Reserve among the Grover brands. These premier brands retail between Rs300 (US$6.36) and Rs 500.

Since April of this year, the Indian government has lifted restrictions on the import of wines and the market for imported wines is slowly picking up. These wines are mostly being shipped from France, California, Australia and Chile. French wines continue to dominate, but the other regions are fast catching up. Wines from these three areas are less complex, blend well with Indian food and are more suitable to the local hot weather.

But while quantitative restrictions on imports have been lifted, the import duty has been jacked up from 130 to 267 percent. In addition, there are special state levies. The end result is that a Bordeaux superior wine, which sells for $8 in Paris, will cost the wine-lover $25 in Mumbai.

So, enter the friendly neighborhood smuggler who will offer you the same stuff at half the official price. "Thanks to the bootlegger, the imported wines market will show a marginal rather than a negative growth," points out an industry analyst.

Local wine producers as well as importers are targeting an unlikely segment: women. The logic being that they are generally averse to being seen consuming hard "brown" liquor such as whisky, rum and brandy, but are game to try out the milder "whites" - gin, vodka and wine. The low alcohol content of wine along with its "sweet" taste makes it an acceptable drink for women.

The new Indian interest in wine has caught the attention of Indian spirit companies who are making all-out efforts to strengthen their wine divisions. The UB group has started talking to major wine manufacturers in the world. "We have various options before us. One is to import wine and distribute it. The whole idea is to use the strength of our distribution and management network," Kalyan Ganguly, president, UB, has been quoted as saying. Liquor major Shaw Wallace, too, is expanding its wine division.

Even foreign players are interested. Barton & Guestier, a wine brand owned by the global liquor giant Seagrams, is keen for acquisitions or technical collaborations with Indian wine makers. Says Frantz Dumey, international brand manager, Barton & Guestier, "Our experts can help Indian wine-makers produce world class wines."

He adds, "The Indian consumer has his own tastes as far as wine is concerned. In India they like both white as well as red. In Denmark for example, people consume red wine at all times. In Belgium, it is white wine that sells more. In India, there is a good balance in the consumption pattern."

On Grover's French export list are its red wines Cabernet Savignon, Rose-Dry and La Reserve, as well as Blanc de Blancs de Clairette, a white wine. The company is also planning to sell wines to at least 50 Indian restaurants in the United Kingdom.

It all began in 1988 when Kanwal Grover took up the challenge of producing wine in India. He checked out seven locations and finally settled on Bangalore, now better known as India's Silicon Valley for its information technology companies and educational institutes. The location had many things going in its favor: rich, well-drained soil; sunny days, cool nights and temperate climate. In all, 35 varieties of vines were imported from France; nine of them took root.

Even today, the Indian share of the international wine market is very small. But local producers are hopeful of the wine-drinking habit picking up faster. Importers are optimistic that as it has done in other sectors, the government will bring down the duties on wine.

The optimists give the example of Australia which just 20 years ago was not a wine drinking country. Now it is a large wine grower, and its vineyards are major tourism destinations. If wine tasting sessions conducted at up-market restaurants in India are a pointer to the future, the oldest liquor known to mankind is here to stay.

And once India becomes a major wine-guzzling country, there will be many more "Cheers!" ringing out at Grover Vineyards and other wine producers.