Pune-based Vijay Kutty, MD of Elkay Spirits and Millennium Spirits has been associated with the alcohol beverage industry for 28 years. He worked at Shaw Wallace and United Breweries prior to starting his own distributorship of domestic and imported wines, beers and spirits in 1996.
What changes have you seen in the wine industry since the mid-90s?
The wine industry has evolved significantly from merely two main producers in Maharashtra – Sula and Indage – to over 50 wineries offering consumers a wide variety of wines, although only a few are making a profit.
What was the cause of the problem?
The root of the problem was that when the Government of Maharashtra brought in the excise exemption in 2001, many farmers in Nashik and Sangli entered the industry without proper marketing plans in place. So when it came to selling their wines, they failed. Even as we speak, there are wineries whose wines are lying unsold and tanks and barrels are full with the previous years’ wines.
Moreover, wineries were expected to lower prices but the two big players did not. They enjoyed the benefit of excise exemption without passing it on to the consumer. So prices remained high, which affected demand.
What about wine consumption?
Wine consumption is growing at about 18% per year but it is not as much as it should be. Broadly speaking, the quality of Indian wines is good. I would rather buy an Indian wine than an imported department store wine which enjoys a premium tag only because it is imported.
What then is the future for wine producers?
I’m afraid not good – for many. There are some like Charosa, Fratelli, Grover-Zampa, Reveilo and Vallonné, to name only a few, whose wines are very good. But significant resources are needed for marketing as many smaller wineries are saddled with debt and huge amounts of unsold wine.
What’s the way out of this impasse?
The price of wine must come down so that people can drink wine more often. When prices come down it will create an impetus in the industry. I have seen expats in Pune buy two crates of Indian wines at a time. They drink wine with their meals every day and are happy to try out Indian wines if they are stored well.
Why should it be that expats and well off Indians only make up most of the demand? Consumers want a value-for-money product. It is the pricing that needs to be addressed, as well as better storage and display of wines in retail. The quality of wines bought in wine stores is not always as good as the wines tasted in the winery.
This extract is from an interview by Brinda Gill in SI June/July 2014