More biz for Indian wines as FSSAI label requirements hit importers

SUMMARY
This festive season augurs well for Indian wines, with 20% increase reported in sales by most winemakers.
This festive season augurs well for Indian wines, with 20% increase reported in sales by most winemakers.
The Food Safety and Standards Authority of India (FSSAI) has made it mandatory for imported foods and alcoholic beverages to list ingredients on the label in Devanagari or English.
The new requirements, however, are not feasible for many international wine producers, for whom India is a small market. Naturally, this means more business for Indian wineries.
Shivajirao Aher, president, All India Wine Producers Association, says the labelling requirements have hit importers hard and led to a gap in the market, some of which is being filled by domestic winemakers. Several importers supply wines to hotel chains and would not like to lose an important customer, so they are aiming to fill this gap from other sources.
"This is difficult for Indian winemakers who may not pay the same kind of attention to us as importers who have had a longer relation with the hotel industry," he said.
For instance, Aher’s winery Renaissance Wines that normally sells 2,000-3,000 cases, has received orders for 10,000 cases, something unheard of in the past.
According to Jagdish Holkar, chairman, India Grape Processing Board, there has been a 20% rise in sales this season because of increase in demand. For the first time in many years, this year the industry may not have spillover stock .
Holkar had earlier told FE that there could be a 20% gap in production owing to the damage cause by hailstorms earlier this year and unseasonal rains. Around 15 million litres of wine is expected to be produced this season.
Pramod Krishna , director general, Confederation of Indian Alcoholic Beverage Companies (CIABC), says popular brands are not available on shelves anymore and the festive season has been definitely hit by the absence of big names in the market.
CIABC is the apex body of wine and spirits industry and boasts of membership of the likes of Diageo, Bacardi and Moet Hennessey among others.
According to Krishna, around R76,000 crore is given by the wine and spirits industry in the country annually in the form of taxes. India imports around 500,000 cases of wine annually.
A recent article in the international wine press expressed confidence in the Indian consumer and Bordeaux-based American négociant, Jeffrey Davies, who runs Signature Selections, is actively looking to expand in India.
"We're sifting through the current wine and spirit importers and distributors to figure out who will be the best fit for our range of wines," Davies said in the article ‘Fine Wine Trade Eyes Up India’ in The Drinks Business.
He believes that as Indian consumers learn more about wine, starting with drinking our own wines, the Indian wine market will continue to grow.
"With the tremendous slowdown in China, and a certain slowdown in America, they're looking to other markets within the BRICS. Russia's having embargo troubles, so India and Brazil are becoming areas of interest," he said in the article.
While wines in the lower segment (R250 a bottle) continue to dominate sales to the tune of 60%, the rest comes from premium and reserve wines in India.
Wine producers feel there could be a rise in sales in this segment though many of them are not willing to say it outright. Most foreign wine is sold in India’s five-star hotels via a quota system.
How this will pan out remains to be seen.