Wine importers urged to stall Indian investment

Foreign importers are being urged not to invest in the Indian wine market until at least 2010 or risk becoming "frustrated" and out of pocket.

Speaking at India's first international wine fair held in Mumbai, Rajeev Samant, Sula chief executive officer and importer of foreign brands such as Hardys and Heidsieck & Co, said the global recession and recent terrorist attacks have hit Indian wine consumption hard.

That combined with, a slow down in the country's vital retail expansion, high import taxes of up to 200% and wine-making ‘state wars' will make it impossible for new players to compete, Samant said.

He told delegates that wine drinking Indians, representing 1% of the 1billion population, are downgrading to cheaper wines, despite India enjoying a 5% GDP growth.

"India wine consumption has enjoyed break-net growth over the last five years leading to a flood of importers and domestic vineyards.

"But the terrorist attacks have devastated the country's tourism industry hitting imported wine sales hard," he said.

December and January hotel occupancy, where 85% of imported wines are sold, was down 50%, Samant added.

But Guy Barroilhet, director of Grupo Errazuriz, said: "Though I agree it will be tough, the movement of opening India to better value has started and it is one of the world markets with the highest growth."

Nishant Kapoor, general manager of importer The Wine Society of India, added: "Importers should focus on the under-served markets of Delhi, Bangalore, Gurgaon, Chandigarh, Hyderabad and Kolkatta where duties are lower."

Thierry's finance director Hatim Dungarwalla said: "This is the time for any exporter to the Indian market to lay the foundations for the future by building relationships with local importers but fiscal regulation will always be a struggle."

UB group chief executive officer Abhay Khewadkar added: "The industry has seen many setbacks but serious players will see it as a passing phase. It is the global players that will pull the industry through by taking Indian wine to the masses.

"Investment in India from an importer or domestic view point must be seen as a 10 year plan."

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