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An Analysis on

Wine industry in
India
A Presentation by
S.Siyamalan
S.R.Swaminathan
Tamil Nadu Agricultural University

Synopsis
Wine consumption
--Preferences
Government Support
The Market
Scenario in southern regions
The essentials/Major aspects
Problems faced

Introduction
The People of India
Annual Per Capita Income Rising
Large Population Gives a Market Base
Government Backed Industry
Wine Declared as Small Scale
Grape is grown over 60,000 ha - production of 1.6
MT
Wine Industry Potential
Market Currently in Infancy Stage
Wines Beginning to Catch On Locally and Globally
Source : FAO, 2005

The People

Source: Yura Beverag

Indian Economy

200
5

200
6

200
7

200
8

200
9

201
0

Population (millions)

1,095.
4

1,110.
4

1,125.
4

1,140.
2

1,155.
0

1,169.
7

Household consumption (US$


billion)

2028

2210

2419

2651

2910

3176

Growth:
9.1

9%

9.4

9.5

9.7

The rising middle class within India is bringing with


it a higher rate of consumption
Wine consumption is also increasing at a rate of
0.5ml per year/ per person

Government Support
Wine Declared as a Small Scale Industry
Manufacturers exempted from excise duties
38 Wineries Currently in Operation
36 located within Maharashtra
5.4mn liters produced annually within
Maharashtra
India totals 762,000 cases sold per year

State Bank of India, for the first time in the country,


has taken the initiative for helping the grape growers
via project UPTECH

Government support Contd..


The
concessions/incentives/subsidies
grants etc. are extended to Wine
Industry at par with Food
Processing industries

project subsidy of Rs.50


lakhs/wine unit
Rs.10 lakhs per year towards
procurement of grapes
grant of Rs.4 crores / wine park

The Market

Source: Food Press Relea

Wine expanded phenomenally by around 18% in


2007
Total Indian Consumption has risen to 650,000
cases (2007-2008)
6-7ml annual per capital consumption

Target Market
Middle class ages 25-39
Current biggest wine consumers
Trendy upper class

Marketing
Open Markets
Maharashtra, Jammu Kashmir, Goa, Assam,
Meghalaya, Tripura, and Arunachal Pradesh.
Auction Markets
Rajasthan, Madhya Pradesh, Bihar, Haryana and
Chandigarh
Government Markets
The governments of the respective states act as
the wholesalers
TASMAC in Tamil Nadu, BEVCO in Kerala, APBC
in Andhra Pradesh and The DSIDC in Delhi

Consumer Preferences
Source: Food Press Release

Wine

Consumption

Red

45%

White

40%

Sparkling

13%

Ros

2%

Traditional Red and White wines account


for 85% of Indian wine consumption

The Current Scenario


in Southern Regions

Indigenous Wineries
Chateau Indage
18 types of wine
Chardonnay, Cabernet Sauvignon, Ugni
Blanc,
Pinot Noir, Gamay, Riesling, Muscat of
Alexandria
Sauvignon Blanc, Chenin Blanc, Zinfandel,
Viognier, Shiraz, Malbec and Grenache

Grover Vineyards
Nine varieties
Zinfandel ,Chardonnay, Pinot Noir,
Sauvignon Blanc, Chenin Blanc,Viognier,
Shiraz,
Viognier and Semillon

Sula winery
Sula Brut, Sula Seco and Sauvignon Blanc

Maharashtra wine Grape


policies

Declaration as a Preferential Area


Declaration as a Small Scale Industry
Concessions in Excise Duty
Concessions in Sales Tax
Wine Sales License
Wine Sales License Fee
Simplification in the system of License
Establishment of Wine Institute
One Window System
Establishment of Grapes Board
Facilities of Food Processing Industries

Wine Parks
To encourage value addition on grapes
Grape Board
for quality control, certification and export
promotion.
Wine Institute
long-term growth strategy.
MIDC has set up Wine Parks with International
comparable infrastructure
at Vinchur, near Nashik & Palus, near Sangli

Karnataka
The Government intends to
Establish two Wine Parks.
Capital Investment Subsidy
Subsidy for Grape Processing
Incentives for marketing and distribution of
wines

Andhra
Government of Andhra Pradesh has issued
G.O.framing new rules on Winery projects.
Very low fee of Rs. 2000 per annum is fixed as
license fee to encourage this industry.
Government may call for applications for grant of
letters of intent in the near future.

Winery Project in Tamil


Nadu
Tamil Nadu produces 90,000 tonnes of Muscat Grapes
and 10,000 tonnes of Thomson Seedless Grapes.
Government of Tamil Nadu has issued a Notification on
Tamil Nadu Wine Manufacture Rules 2006 for
regulating manufacture of wine.
Government of Tamil Nadu has approved the proposal
of TIDCO for establishing a Winery
TIDCOs Initiative
TIDCO proposes to establish wine making units in association with
private sector.
The prospective entrepreneurs may like to contact Thiru B.
Ramakrishnan, General Manager, TIDCO for further details at Cell No.
9444448994.

Major aspects
The primary factors acting as
constrain for this industry in India.
At the very outset we have four
major issues to note:
1.
2.
3.
4.

Legal aspect,
Global aspect,
Social aspect and
Promotional aspect.

Problems Faced..
Wine drinking has not caught on
quality wines are priced relatively high.
Since the volumes are low, production costs
are high, as are taxes.
Real challenge -to develop a domestic market
Huge prohibiting factor - 300 per cent duty slab
To distribute finished goods

Various taxes and duties applicable to


the wine industry

Excise Duty
Additional Duty
Markets & Regulations
Centre for Civil Society
Distillery/Brewery License
Fee
Bottling fee
Litterage fee
Assessment Fee
Franchise Fee
Permit Fee
Various taxes and duties
applicable to the wine

Raw Material Excise


Availability Fee
Brand/Label Fee
Transportation Fee
Import Pass Fee
Export Pass Fee
Vend Fee
Sales Tax/Surcharge
License Fee
Toll Tax
Excise Duty
Additional Duty
Gallon age Fee

Standards
Ethyl alcohol -prescribed in 4 of IS 3752:1988
Enforced by State Excise Authority
Food additives - PFA /CODEX /JECFA
Flavor -PFA/FEMA GRAS
Carbonation -Grade 2 of IS 307:1996
Packing
glass bottles -IS 1662:1974
plastic bottles made of PET -IS 14537:1998
Sampling - IS 3753:1984

Conclusion
Presently Indian wine industry is in a nascent stage,
though it has kick started only from Maharashtra
much remains to be seen at the national level.
Indians will have to descriminate wines with other
alcoholic liqours.
The wine in fact is a social and health drink,
its consumption has to be promoted through various
media campaigns and wine festivals.

We hope, subsequently there exists a


hugescopefor expansion
inareaandproduction of wine grapes in our
country.

References
1.
2.

3.
4.
5.
6.
7.
8.

Multiple aspects of Indian Wine Industry


Karnika Seth
Present Scenario of wine industry in India
G.S.Karibasappa , P.G.Adsule , S.D.Sawant and K.Banerjee
N.R.C. for grapes, Manjri Farm, Pune 412 307.
Wine project APICTO
Winery Project TIDCO
Maharashtras grape policy 2001
Karnataka Grape Processing and Wine Policy 2007
DEssenceconsulting WineReport
Wine Industry in Maharashtra
Sudipto Mitra