• India is not traditionally a wine drinking country.• Due to earlier period of prohibition in India and

higher price compared to spirits like whisky and brandy manufactured in the country.

Fermentation scenario of India

• Premium Wines (Still wines): In this category the Indian market is divided mainly into two major categories - White and Red wines;

• Sparkling Wines: This wine is generally considered to fall within the White wine category by many consumers;

• Fortified wines: This is not yet made or regarded as quality wines.

Consumption of wine in India

The consumption pattern is as follows: • Mumbai (39%), • Delhi (23%), • Bengaluru (9%) • Goa (9%), • where as the rest of India has only 20%

consumption.• Today, the consumption per head is roughly

0.0030 litre per annum.

Market trends

• India ranks 77 in terms of wine consumption in the world.

• India's wine market is currently equivalent to around 200 people sharing one bottle but it is likely to grow at projected 22% in next three years due to the rise in domestic consumption.

• The current consumption is 5m bottles a year.

• In 2006, Indian winemakers sold roughly 940,000 cases of wine domestically and 60,000 cases overseas, up from 530,000 domestic cases and 30,000 overseas in 2003, according to industry figures.

• In 2007, the wine sales were 7, 20,000 cases.• The Indian wine market currently stands at 4.6

million litres in volume terms and Rs 450 crore in value terms.

• The wine market is expected to grow to 18.3 million litres by 2015.

• Nearly 80 per cent of wine sales are accounted for by the major cities, especially New Delhi, Mumbai, Chennai, Kolkata, Pune and Bengaluru.

• West India accounts for over 41 per cent of total volume sales of wine in India, followed by North India, which accounts for 29 per cent of volume sales.

• Nearly 90 per cent of wine sales are for still (that is, red and white) wines.

• Around 63 per cent of the volume sales of wine are through off-trade channel in five -star hotels, pubs and bar-restaurants.

• There are nearly 74 wineries across the country out of which 52 are in Maharashtra and 17 in karnataka.

• Maharashtra accounts for almost 94% of the country’s wine production.

• In the fiscal year 2006-2007, the total wine production of grape wine in India was 1.42 crore litres, out of which Maharashtra’s share was 1.32 crore litres.

• Investment in Maharashtra’s wine industry has increased by 74.31% to Rs. 247.71 crore in the fiscal year 2006-2007.

Indian States population with high consumption of wine

State Litres

Maharashtra 96,752,246

Goa 1,347,668

Karnataka 52,282,946

Chandigarh 900,635

Andra Pradesh 5,742,036

Tamil nadu 6,560,242

West bengal 13,205,697

Source: moinc.com

Value Added Tax (VAT) for wine sale in different states

• State of Maharashtra – 20%• State of Delhi – 20%• State of Haryana – 20%• State of Chandigarh – 4%• State of Karnataka - No VAT• State of Tamil Nadu - 53%• State of Kerala – 12.5%

Foreign Direct Investment Policy

• The policy for distillation of alcohol has been announced vide Press Note 4 (2006) according to which FDI up to 100% is permitted on the automatic route for distillation & brewing of alcohol subject to licensing by the appropriate authority.

• Karnataka is the third largest wine producer of India, Grover Vineyards has its winery situated in karnataka region.

Alcohol Production in IndiaAlcohol Production

(in million liters)

Alcohol Year

Molasses Prod.

Production of Alcohol

Industrial Use

Potable Use

Other Uses

Surplus Availability

 

1998-99 7.00 1411.8 534.4 5840 55.2 238.2

1999-00 8.02 1654.0 518.9 622.7 576 455.8

2000-01 8.33 1685.9 529.3 635.1 588 462.7

2001-02 8.77 1775.2 5398 647.8 59.9 527.7

2002-03 9.23 1869.7 550.5 660.7 61.0 597.5

2003-04 9.73 1969.2 578.0 693.7 70.0 627.5

2004-05 10.24 2074.5 606.9 728.3 73.5 665.8

2005-06 10.79 2187.0 619.0 746.5 77.2 742.3

2006-07 11.36 2300.4 631.4 765.2 81.0 822.8

Availability and utilization of ethanol in India

Year Highest available alcohol from

molasses (billion litres)

Ethanol utilization

(billion litres)

Ethanol required for blending

(billion litres)

2010-11 2.3 0.86 1.53

2011-12 2.3 0.89 1.64

2012-13 2.3 0.91 1.70

2013-14 2.3 0.94 2.02

2014-15* 2.3 0.97 2.13

2015-16* 2.3 1.00 2.23

2016-17* 2.3 1.03 2.34

* ProjectedSource: Planning Commission (2003) estimates on highest available alcohol from molasses

Sugar Cane Ethanol

Limited Option for Indiao Presently possible blend : 5% o May at most be sufficient for 10%

Ethanol production and demand scenario of India

Demand all over Country

5000 Lac liters

Existing Production 1840 Lac liters

Total demand 2460 Lac liters

Source: http://www.ethanolindia.net/

Study questions

Which state stands first in wine production in India.

Which state has no VAT on wine sale in the country.

How many wineries are presently producing wine in karnataka state.

Which are all the cities have higher consumption of wine in India.

List different types of wines available in India.