Indian wine is a hot topic these days. The industry has grown at 25 per cent plus over the last three years to its current value of Rs 260 , and could be worth Rs 2,000 crore by 2010. Brand Line of The Hindu newspaper caught up with Rajeev Samant, CEO of Sula Wines, to get his perspective on how to keep the momentum going.
You have been quite successful at marketing Sula wines. What does a wine producer need to do to market wine in India?
Two things have to happen. The first is the market itself becomes ready at a certain point, which obviously helps a lot. The other thing is you have to educate a lot. You have to ensure a lot of positive media coverage. And then you have to go out and put your product in front of consumers and make them understand what it’s all about. And in India that is very important because no one actually knows what wine is about. Huge numbers of tasting, sampling, make sure you are available at events and parties. You have to push the availability of wine, which was non-existent a few years ago. Sula has been to that extent fortunate in that we released our wine in 2000 when the country was just about to take off. And so we have grown along with the India boom.
Is the market growing too quickly? Is there pressure to put out a wine before it is ready?
You can never say that a market is growing too quickly. It is great. There are those wines, which you pump out fast – the young, fresh, fruity wines – and there are those wines, which have to serve their time before you release them. And so far we have not had that issue. But we have had times when we have been stocked out of certain vintages.
What do the producers have to do to make sure the Indian wine industry does not lose its momentum?
They have to understand it is quality, not quantity. If we go down the quantity route, we are doomed to repeat the same mistakes the French made and the Australians are about to repeat. Going for cheap bulk wine is great for the short term, but leads to serious problems for the middle and long term. So, growers should concentrate on producing less, but higher quality grapes. As long as you improve quality every year, then the quantity will take care of itself. But we must improve quality every year. Otherwise Indian wine will get a bad name.
Are Indian wines priced so low that the image of wine as a premium product is negatively affected?
You get this question from both sides. You get asked why wine is so expensive here when you can buy a fairly decent bottle for three Euros in Europe. For me, it is very important that wine should be accessible. I am not interested in targeting my wine at an elite audience. Sure, there are those wines in our portfolio that do that. For example, the Dindori Reserve Shiraz is an important example because the amount of work we put into that wine, we have to price it higher than any Indian wine had ever been priced before, and appreciably higher. And that has its own clientele. We are selling out of that vintage year after year even though it is at Rs 600 plus a bottle. What I want to do is reach the broadest audience possible. So we have wines like our Chenin Blanc, which is at Rs 350, which is accessible to many people.
What about support from the Government? What would you like to see happen in terms of Government action?
The Government has been great in that excise duty has been waved on wine. That is the biggest step the Government has taken. And one by one, other small steps are being taken. Of course, the recent freeing up of supermarkets to sell wine is a pretty big step.
As for the things we would like the Government to focus on; our industry is becoming more mature, and as it becomes more so, the basic requirement is infrastructure. And what we are really keen to see right now is the four-lane highway from Bombay to Nashik. The Maharashtra government has been talking about the Bombay-Pune-Nashik industrial corridor but let’s face it, Nashik has been neglected. Nashik is the future of Indian wine and we need infrastructure. We need better roads and we need a better power situation. Right now, in fact, our agriculture subsidy is negative. Somebody had promised us free power, which we had not asked for. Next thing we know, we are not getting any power at all because if it is free, they just turn off the switch and leave us to our own devices. And so we have to use expensive diesel to power generators in our vineyards and all growers have to do the same. We have about 200 acres of vineyards and if you are to irrigate those on a diesel generator, that is a lot of diesel. Definitely we are at a big disadvantage when you compare us to growers in other countries, where they have cheap and plentiful power.
Does the industry need to be protected?
I think we still need protection from cheap wine imports. Wine producers in the EU, because of the common agriculture programme, are heavily subsidised. We are not. We still need some protection from the cheaper wine imports. However, on the other hand, we should not put the duty that we do on expensive wines. There is no point putting a 150 per cent duty on a wine that costs $50 in the first place. What we would like to see happen is the entire ad valorem system that we currently have now be replaced with a flat duty of say Rs 250. The cheaper wines become more expensive while the expensive wines became much cheaper. That is what we would support.
By Tariq Engineer
Copyright 2006 The Hindu