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 ar!et Scenario in southern re"ions The essentials# a$or aspects Problems faced

Introduction
% The People of India Annual Per &apita Income Risin" 'ar"e Population Gives a ar!et (ase % Government (ac!ed Industry Wine )eclared as *Small Scale+ % Grape is "rown over ,-.--- ha - production of /., T % Wine Industry Potential ar!et &urrently in Infancy Sta"e Wines (e"innin" to &atch 0n 'ocally and Source : FAO, 2005 Globally

The People
2 2 2 Indian Economy
Population 1millions2 Household consumption (US$ illion! /.-34. 5 2028

Source: Yura Beverages

0 0 5

/.//-. 5 2210

0 0 6

/./64. 5 2"19

0 0 7

/./5-. 6 2651

0 0 8

/./44. 2910

0 0 9

/./,3. 7 #176

0 1 0

Growth8 3./

39

3.5

3.4

3.7

% The risin" middle class within India is brin"in" with it a hi"her rate of consumption % Wine consumption is also increasin" at a rate of 0$5ml pe% yea%& pe% pe%son

Government Support
Wine )eclared as a *Small Scale+ Industry anufacturers e:empted from e:cise duties ;< Wineries &urrently in 0peration ;, located within aharashtra 4.5mn liters produced annually within aharashtra India totals 7,6.--- cases sold per year

State 'an( o) India* )o% the )i%st time in the count%y* has ta(en the initiati+e )o% helpin, the ,%ape "rowers via pro$ect =PT>&?

Government support &ontd..

The concessions#incentives#subsidi es "rants etc. are e:tended to *Wine Industry+ at par with @ood Processin" industries

A pro$ect subsidy of Rs.4la!hs#wine unit A Rs./- la!hs per year towards procurement of "rapes A "rant of Rs.5 crores # wine

The

ar!et
Source: Food Press Release

Wine e:panded phenomenally by around /<9 in 6--7 Total Indian &onsumption has risen to ,4-.--cases 16--7-6--<2 ,-7ml annual per capital consumption

Tar"et ar!et iddle class a"es 64-;3 &urrent bi""est wine consumers Trendy upper class

ar!etin"
Open Markets aharashtra. Bammu Cashmir. Goa. Assam. e"halaya. Tripura. and Arunachal Pradesh. Auction Markets Ra$asthan. adhya Pradesh. (ihar. ?aryana and &handi"arh Government Markets The "overnments of the respective states act as the wholesalers TAS A& in Tamil Dadu. (>E&0 in Cerala. AP(& in Andhra Pradesh and The )SI)& in )elhi

&onsumer Preferences
Source: Food Press Release

-ine
Red White Spar!lin" RosF

.onsumption
549 5-9 /;9 69

%Traditional Red and White wines account for <49 of Indian wine consumption

The &urrent Scenario in Southern Re"ions

Indi"enous Wineries
&hateau Inda"e
/< types of wine
Chardonnay, Cabernet Sauvignon, Ugni Blanc, Pinot oir, Gamay, !iesling, Muscat o" Ale#andria Sauvignon Blanc, Chenin Blanc, $in"andel, %iognier, Shira&, Malbec' and Grenache

Grover Eineyards
Dine varieties
$in"andel ,Chardonnay, Pinot Sauvignon Blanc, Chenin Blanc,%iognier, Shira&, %iognier and Semillon oir,

Sula winery

aharashtra wine Grape policies

)eclaration as a Preferential Area )eclaration as a Small Scale Industry &oncessions in >:cise )uty &oncessions in Sales Ta: Wine Sales 'icense Wine Sales 'icense @ee Simplification in the system of 'icense >stablishment of Wine Institute 0ne Window System >stablishment of Grapes (oard

Wine Par!s
To encoura"e value addition on "rapes Grape (oard for Guality control. certification and e:port promotion. Wine Institute lon"-term "rowth strate"y. I)& has set up Wine Par!s with International comparable infrastructure at Einchur. near Dashi! H Palus. near San"li

Carnata!a
The Government intends to
>stablish two Wine Parks$ .apital In+estment Su sidy Subsidy for /%ape 0%ocessin, Incenti+es for mar!etin" and distribution of 1ines

Andhra
Government of Andhra Pradesh has issued G.0.framin" new rules on Winery pro$ects. Eery low fee of Rs. 6--- per annum is fi:ed as license fee to encoura"e this industry. Government may call for applications for "rant of letters of intent in the near future.

-ine%y 0%o2ect in 3amil 4adu

Tamil Dadu produces 3-.--- tonnes of uscat Grapes and /-.--- tonnes of Thomson Seedless Grapes. Government of Tamil Dadu has issued a Dotification on Tamil Dadu Wine anufacture Rules 6--, for re"ulatin" manufacture of wine. Government of Tamil Dadu has approved the proposal of TI)&0 for establishin" a Winery
3I5.67s Initiati+e TI)&0 proposes to establish wine ma!in" units in association with private sector. The prospective entrepreneurs may li!e to contact Thiru (. Rama!rishnan. General ana"er. TI)&0 for further details at &ell

a$or aspects
The primary factors actin" as constrain for this industry in India. At the very outset we have four ma$or issues to note8
/. 6. ;. 5. 'e"al aspect. Global aspect. Social aspect and Promotional aspect.

Problems @aced..
Wine drin!in" has not cau"ht on Guality wines are priced relatively hi"h. Since the volumes are low. production costs are hi"h. as are ta:es. Real challen"e -to develop a domestic mar!et ?u"e prohibitin" factor - ;-- per cent duty slab To distribute finished "oods

Earious ta:es and duties applicable to the wine industry

>:cise )uty Additional )uty ar!ets H Re"ulations &entre for &ivil Society )istillery#(rewery 'icense @ee (ottlin" fee 'ittera"e fee Assessment @ee @ranchise @ee Permit @ee Earious ta:es and duties applicable to the wine Raw aterial >:cise Availability @ee (rand#'abel @ee Transportation @ee Import Pass @ee >:port Pass @ee Eend @ee Sales Ta:#Surchar"e 'icense @ee Toll Ta: >:cise )uty Additional )uty Gallon a"e @ee

Standards
>thyl alcohol -prescribed in 5 of IS #75281988 >nforced by State >:cise Authority @ood additives - P@A #&0)>IJ #B>&@A @lavor -P@A#@> A GRAS &arbonation -Grade 6 of IS ;-78/33, Pac!in" "lass bottles -IS 16628197" plastic bottles made ofJ P>T -IS 1"5#7819989 Samplin" - IS #75#8198"

&onclusion
JPresently Indian wine industry is in a nascent sta"e. thou"h it has !ic! startedJ only from aharashtra much remains to be seenJ at theJ national level. IndiansJ will have to descriminateJ wines with other alcoholic liGours. TheJ wineJ in fact isJ a social and healthJ drin!.
its consumptionJ has to be promotedJ throu"h variousJ mediaJ campai"ns andJ wine festivals.

-e9 hope* su se:uently the%e e;ists a hu,e9scope9)o% e;pansion in9a%ea9and9p%oduction o)9 1ine ,%apes in ou% count%y$9

References
/. L ultiple aspects of Indian Wine Industry K Carni!a Seth PresentJ ScenarioJ of9 wine industryJ in India K G.S.Caribasappa ,J P.G.Adsule . S.).Sawant and C.(aner$ee D.R.&. for "rapes. an$ri @arm. Pune A 5/6 ;-7. Wine pro$ect API&T0 Winery Pro$ect TI)&0 aharashtraMs "rape policy 6--/ Carnata!a Grape Processin" and Wine Policy A 6--7 )M>ssenceconsultin" A WineReport Wine Industry in aharashtra K Sudipto itra

;. 5. 4. ,. 7. <.