will india embrace fine wine?

The Financial Times have today published an article on market developments for Fine Wine in India. Ditton Wine Traders, and James Swann in particular, have done extensive research on this, which has been used by the FT for this article. 

As you may know, negotiations are going on between the EU and India to draw up a new Free Trade Agreement (FTA). Apparently, consensus has already been reached on fine wine, one of the industries covered by the FTA. At this stage, we don't know what has been agreed to but it is clear that, if import duties on fine wine in India would be reduced, there could be a massive boost for the fine wine industry.

We will be closely following developments and will post the full insights we have gained through our research here on the blog. Stay tuned.

We are also tweeting about the Free Trade Agreement. Do follow us on @DittonWineTrade with hashtag #IndiaEUFTA.

Below is the FT article in print. You can also download the article here

India struggles to develop taste for wine By James Lamont in New Delhi. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/98ab88e4-3ddd-11e1-91f3-00144feabdc0.html#ixzz1kIJEHjtW At a small, Italian-style restaurant on the fringes of south Delhi, a wine tasting is under way. Within earshot is the drone of traffic on a four-lane highway and the noisy building site of an overland metro – reminders of India’s growing economy. Led by Kulbir Singh, vice-president of the Indian Wine Society, the group of professionals and executives from the beverages industry are sipping from long-stemmed glasses of Piper-Heidsieck champagne. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/98ab88e4-3ddd-11e1-91f3-00144feabdc0.html#ixzz1kIJKqGX9 Mr Singh is the first to acknowledge that wine appreciation in India is a minority interest. In a liquor market dominated by whisky, he says the pleasure of a leisurely glass of wine from a vineyard in France, California or Australia, not to mention enjoying wine with food, has a long way to go to catch on. “The market is expanding, particularly at the low end. [It’s limited] because of the tax structure which is quite ridiculous,” he says. “A €2 to €3 bottle turns into a Rp1,000 (€15.4) one.” International wine traders, however, are increasingly eyeing India as having the potential to follow China as an explosive high-value market. Some view India as a future source of demand to offset drops in other markets and as a pool of wine investment. But, after a brief rally, the country has failed to deliver. Wine volumes fell 15.7 per cent between 2009 and 2010, according to data from International Wine and Spirit Research. While China serves as an encouraging example, the gap between the two Asian markets is striking, research by UK-based Ditton Wine Traders shows. China imports 2.5m cases of Bordeaux a year. Recent auctions in Hong Kong – which turned itself into an Asian wine hub by dropping taxes in 2008 – have hit record prices in spite of the economic downturn experienced elsewhere in the world. By comparison, India’s market is undeveloped. Asia’s third-largest economy imports only 100,000 cases of wine a year. High quality outlets are few. Indian Ocean island states, such as Sri Lanka and the Maldives, import more wine than India, a country of 1.2bn people. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/98ab88e4-3ddd-11e1-91f3-00144feabdc0.html#ixzz1kIJPuEBT Consumption per adult is 0.01 litre a year, or two teaspoons, a fraction of the 4.5 litres in China (to say nothing of the 27.7 litres knocked back in the UK). The same goes for beer. Indians consume barely one litre of beer per person a year. The average Chinese consumes 23 litres, a little above the world average of 22 litres. Yet, on paper, more wealthy individuals in India and a rising, more receptive middle class hold the ingredients for higher demand for better quality wines. “Comparisons of India’s wine market with China are a long shot,” says Rajiv Singhal, director of Helsinki-based Fine Publishing India. “The country is not ready to displace anyone, or take up slack from overstocked or crashing markets.” The obstacles to greater wine consumption are formidable. The biggest is price. The government applies a punitive tariff regime on imported wines and spirits of at least 150 per cent. Individual states apply their own taxes, varying from 30 per cent to 100 per cent. Gujarat, a state with one of the fastest-growing economies, bans the sale of alcohol. Labelling requirements also complicate distribution. Improved access hinges on bilateral trade agreements. A proposed EU-India free trade agreement, expected to open up a beverages market dominated by Vijay Mallya’s United Beverages Group, has been under discussion since 2007. But few European diplomats in New Delhi expect quick results after deadlines set by prime minister Manmohan Singh have been missed. Fears of blighting the lives of poor people with alcohol – a legacy of liberation leader Mahatma Gandhi’s austere doctrine – are also partly responsible for the government’s reluctance to encourage cheaper, more available liquor. Subhash Arora, founder of the Delhi-based Indian Wine Academy, warns against expectations of a sudden breakthrough in trade talks in the coming months but foresees “a gradual thaw” in the duty regime. “The understanding of wine as a product is still in a stage of infancy,” he says of the government’s approach. High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/98ab88e4-3ddd-11e1-91f3-00144feabdc0.html#ixzz1kIJT4Pfs He and others warn of over-optimistic forecasts. Rather than racing ahead, growth in wine sales has moderated over the past five years to about 12 per cent from levels double that. Leading local wineries such as Grover and Sula have expanded under government protection and recently won international acclaim. The sales of Sula, owned by Nashik Vintners, rose 40 per cent last year. “Today, we have a reasonable choice of wines produced in India to see us through most occasions,” says Reva Singh, editor of India’s Sommelier magazine, of the widening domestic range. But oversupply is causing pain. Vineyards in western India, after expanding with the support of state subsidies and low-cost loans, are cutting back. Ditton’s research says 40 per cent of wineries have stopped production in Maharashtra, the largest-producing state, over the past three years as growers switch to table grapes. By some estimates, the installed winemaking capacity in Maharashtra is nearly three times annual national consumption. Many grape-growing entrepreneurs are looking for an exit. “The days of 25 per cent growth in the Indian wine trade are gone,” says Mr Singhal. Additional reporting by Louise Lucas

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Ditton Wine Traders buy and sell fine wine.

The finest wine, at the very lowest prices. For drinking & investment; for both Private and Trade customers.

Ditton Wine Traders are exactly that, wine traders. Since 2004, we have bought & sold fine wine on a daily basis, at fair and competitive prices.

The prices you see on the website are the prices you pay – with no hidden extras. The advice is free here too. We do everything possible to make sure we keep our costs down. There is no shop – we use the phone and email. We don’t employ a lot of staff and we don’t have a swanky London office.

As a result, we are able to operate on a much lower margin than many of our competitors. Our ever increasing network of negociants, distributors, wholesalers, retailers and private stock-holders means we will frequently bring you ‘impossible to match’ deals. We specialize in the best wine from Bordeaux, as well as a fast growing list of the most sought after wines from Burgundy, Champagne and Italy.