At a small, Italian-style restaurant on the fringes of south Delhi, a wine tasting is under way. Within earshot is the drone of traffic on a four-lane highway and the noisy building site of an overland metro – reminders of India’s growing economy. Led by Kulbir Singh, president of the Indian Wine Society, the group of professionals and executives from the beverages industry are sipping from long-stemmed glasses of Piper-Heidsieck champagne.
This piece by James Lamont originally appeared in the Financial Times of London on January 22nd, 2012.
Mr Singh is the first to acknowledge that wine appreciation in India is a minority interest. In a liquor market dominated by whisky, he says the pleasure of a leisurely glass of wine from a vineyard in France, California or Australia, not to mention enjoying wine with food, has a long way to go to catch on.
“The market is expanding, particularly at the low end. [It’s limited] because of the tax structure which is quite ridiculous,” he says. “A €2 to €3 bottle turns into a Rp1,000 (€15.4) one.”
International wine traders, however, are increasingly eyeing India as having the potential to follow China as an explosive high-value market. Some view India as a future source of demand to offset drops in other markets and as a pool of wine investment.
But, after a brief rally, the country has failed to deliver. Wine volumes fell 15.7 per cent between 2009 and 2010, according to data from International Wine and Spirit Research. While China serves as an encouraging example, the gap between the two Asian markets is striking, research by UK-based Ditton Wine Traders shows.
China imports 2.5m cases of Bordeaux a year. Recent auctions in Hong Kong – which turned itself into an Asian wine hub by dropping taxes in 2008 – have hit record prices in spite of the economic downturn experienced elsewhere in the world.
By comparison, India’s market is undeveloped. Asia’s third-largest economy imports only 100,000 cases of wine a year. High quality outlets are few. Indian Ocean island states, such as Sri Lanka and the Maldives, import more wine than India, a country of 1.2bn people.
Read the rest of the story at The Financial Times.