Wi-Not

India, in spite of the recession is managing a growth in the F&B industry. New establishments are opening doors everyday making the gastronomic world ever more competitive. While bar competitions and wine competitions abound, Magandeep has often eluded the temptation to organise a formal sommelier competition to ascertain and adjudge the qualities of a true wine professional. This year he was convinced that the wine industry albeit still nascent is showing signs of constant evolution and therefore, finally, Wi-Not has managed to put in place a competition to gauge the best servers in the industry, the finals of which took place on 2nd Dec at IFE 2008, New Delhi. The contestants were judged on their knowledge and practical ease in the subject first in theory and then in practice. The live finals promised to be a quite a show with all that a sommelier is expected to know and do being executed in front of a live audience comprising a hand-picked jury of wine professionals. This year the jury comprised of Andrew Steel, GM, Shangri-La, New Delhi
Stephane Soret, Head sommelier, The Imperial, New Delhi
Angele De Ioia, Maitre D’Hote and Manager, The Oberoi, New Delhi

The participants were put through gruelling rounds of wine and food pairing, spotting errors on wine lists and finally live service demonstration followed by tasting and impromptu commenting exercise. The level of competence required was high and the contestants really impressed the judges and thinternational winemakers gathered to witness the event.

Riedel and Pulltex supported the event thus ensuring a high quality of wares and accessories to be used by the participants.

Judges of the Indian Sommelier championship flanked by participants

This is perhaps the most important set of questions that we get asked – How is the Indian market, do Indians really drink, what are the taxes, how does one go about getting wine into India. So we thought it would be easier to address this once and for good. Once again, what we are putting here is a general idea and the actual requirements could be a bit different. If you find discrepancies please mail us and we shall amend accordingly.

Indians do drink; if anything intoxication and over-indulgence would be the more serious of our problems. The market, which has laid dormant for some time was growing silently but the anticipated rush from increased commercial activities, foreign direct investments, shooting markets, a leaping economy, 2010 Commonwealth Games, and the arrival of multinational retail outlets across Indian cities and towns is signalling a never-before change on the horizon.

Onto the next topic: wine logistics. Moving wine into or even within India is a nightmare. In fact, it is so tough that part of the success in the wine business depends on how you manage to reach the correct wines to their target destination. So, to help simplify how things work, here is a hopefully-not-too-confusing explanation of bringing wines into India.

If you are intending to send wines for a tasting, then know that courier is a tough channel; simply because there is no telling when it works and when it doesn’t. Too many narrow-minded and unprofessional people have piled up their personal stocks by importing wines under this pretence all while promising wineries a distribution plan. The result has been that wineries are left feeling embittered and cheated and courier companies have gotten smarter. If you must send stock, try and limit quantities to no more than one bottle of each wine or else send smaller bottles. A better plan would be to forward (sea/air) through a registered licensed wine importer. The documents required to clear the shipment are as follows:-

1. Commercial Invoice
2. Packing List
3. Country of Origin Certificate
4. Chemical Analysis Report
5. Air Way Bill Copy

Once the documents are received by the clearing party, the shipment can be cleared and bonded either in a private or a public warehouse. Ideally, you should bond the stock in a duty-free custom-bonded warehouse or else the customs will insist for a PHO (Prevention of Health), under the PFA (Prevention of Food Adulteration) Act. If this happens then the shipper will be required to send one bottle of each wine for a laboratory test for which samples will have to be drawn from the consignment and once the report comes as positive (i.e. fit for import), only then will customs release the remaining stocks. A different label of a wine even from the same wine-house is considered as a different wine for the sake of examination.

While all this is being conducted you will have to pay detention charges to the Airport Authority for holding the stocks for as many days as required till the test results come back. By bonding in a Custom Bonded Warehouse, all these problems can be avoided.

Finally, the stocks can be transferred to the importer’s warehouse. From here, the stocks can be moved after payment of customs duties and the destination’s state levies.

To give an idea of how the duties and local levies calculation works, do have a look at the attached Excel sheet. (I still can’t figure out how to upload the file itself but write us and we shall be happy to mail it to you.)

Some things which have been assumed and you may change as per your own case specifications would be as follows:

• Freight charges (cost of shipping from your winery to the final destination, usually a port like Mumbai. This will also change depending on the medium and quantity of stock sent.)
• Current conversion rate for the Euro (which is used in this table solely to calculate the State duty in Delhi)
• VAT and TCS have been added but some hotels may prefer to see price lists without the same.

So, as you can see, it isn’t exactly a cheap affair; even simple wine becomes fairly expensive, and to this will be added the most incomprehensible and incorrigible and irrational of margins yet to be inflicted on the wine: that of the hotels and restaurants (roughly 3-5 times of their buying price). So, for the consumer, the selling price of a wine on a hotel list in India is about 30 times or more than what it is in a similar restaurant in the country of origin of that wine.

Hence, it is incorrect to say that Indians do not drink wine because it is not a part of their culture or because it does not go with spicy Indian food. Indians do not drink wine because it is extremely expensive and unaffordable. The only reason we drink Indian wine (well some of us who are desperate enough at least) is because we have to pay less for it than any foreign wine in retail.

However all is not despair; there is a duty-free scheme made available to all establishments that earn foreign exchange. Mostly hotels but also some restaurants are allowed to import a certain percentage of their foreign exchange earnings without paying central (custom) duties. This means an exemption of around 160%. Now, wines become a lot more affordable. This is not available to all restaurants and not at all to retail but there also some good news is awaited. Wine is soon to be classified as a soft alcoholic beverage and, along with beer, would soon be available through many other retail channels than just liquor shops. A similar license could also be introduced which would cost a lot lesser than the full-range liquor service license. This new license would enable a bar to serve beer and wine exclusively thus furthering the awareness quotient.

So, all in all, times are not all that bad. If you have already been in touch with an importer we suggest you try and take things forward. I hope this has been useful. I look forward to your queries or random extremely large sums of donations.

If you are already marketing or thinking of marketing wine in India, the following article is for you. Before we start, I will first answer the million-dollar question, “What prompted me to write this?” and the answer is, with stiff competition that’s only getting tighter it is most pertinent to get the branding exercise right. While many have got it quite right from the point of view of the Indian consumer, some seem a bit off the mark. Maybe yes, maybe no…but if it helps then why not!!

Education, Education, Education: Yes, boring and jaded as it sounds, education is the key to success. We deeply believe in it. Nowadays, an average Indian wine consumer is well travelled and has an educated palate. But we need to know why one product is better than a dozen others already present in the market. What is it that makes it special? Let’s talk about the soil, climate, the river which runs along the vineyard or that broken windmill…..c’mon share your story with us, we’re listening.

Building Brands: If you are serious about doing your business with us Indians, we want you to build your brand. I don’t want to sound like a brand guru but the only way that your product is going to survive among the sea-full of other brands out there is if you invest in your brand and build a lasting value. So, how you do it? The answer lies in doing consumer and trade dinners along-side other events. I am not talking about a one-time effort but a consistent one. As Magan rightly says, “you can create a brand over and over again but unfortunately you can kill it only once.” Think long term; if you are here for a quickie…hmmm….maybe you should be focusing your energies somewhere else.

Wine Packaging & Labels (especially back labels): O.K. So what do Indians want to see on the back label except for complex names that we really can’t pronounce or the name of the vineyard which we have no clue about? The front label is for your design team to play with who must keep in mind the local and national laws/ requirements. Now let’s talk about the back label. We as Indians are a big, diverse lot in the sense that we speak many languages, come from different cultural backgrounds, and have different habits and stimuli – but the one thing that brings us all together is that commonly accepted business language remains the same all over the country – English. So, we would appreciate if the back label comes in English and it tells us the following:

1. Grape varieties (if not already mentioned on the front label)
2. Food pairing recommendations
3. Service temperature
4. An idea of how long the wine can be cellared
5. Origin or where exactly the wine comes from
6. Tasting note
7. Any special story about the wine that the winemaker wants to share with us like, what makes the liquid in the bottle special?
8. The legal mumbo jumbo

Now a word (actually, a bit more) about packaging. Well, does the wine necessarily need to come in a glass bottle? How about tetra packs, bag-in-box or plastic bottles? You first reaction may be negative. “Nah! The market is too young to handle this.” But try it and you will be surprised how well your products are received by the consumers. We also want to contribute towards lowering the carbon footprint of the wine we consume (But remember to educate the consumer on the reason behind using such packaging.)

Wine Sales & Distribution Management: I wonder how many wine importers personally visit the vend shops and outlets in hotels to speak with the sales staff to know the staffs’ concerns about the product. I personally know a couple of them who do this and trust you me their sales always soar no matter which way the general market may seem to point. I agree that a lot has been written about poor placement of wine in high/ fluctuating temperatures, wine stored in bright lights and a lot more at the vend shops. But, let’s think proactively for a moment and we will start to realize that all these are opportunities to work on. How about having a trade session some day in which a couple of sales staff at the vend shops are educated about the need to store wine at the right/ constant temperature, away from bright lights, up-selling etc? Or providing them with wine cabinets to store wine correctly? Think of it as investment rather than expenditure.

Encouraging Trials: How wonderful it would be if we could just try some wine before we buy! This would not only help the consumer trade up but also avoid further disappointments if the wine is not to his/her taste and preferences. I look forward to those days when such dreams become a reality. But till then always try and initiate wines by-the-glass (BTG) programmes. Organise for sommeliers to taste your product with their clients free of charge. Such encouraging practices benefit the brand in the long run and also help win you clients who understand why they drink a certain wine and won’t get lured easily by competition. Some five star hotels have got “Enomatic” systems to offer tasting measures of the wines to their guests (of course at a price), which I think is a clever way to increase wine sales and introduce people to wines. So, kudos to them who came up with this idea. But don’t despair, you can buy it in India now.

So folks, that was but a little peep into the mind of an Indian consumer. I hope you find it useful. The real outcome would be if these insights act as catalyst for change, the sooner the better and when they do, I will be one happy vino-bunny!

Wine certainly has a way about it, attracting people and absorbing them completely. Let’s raise our glasses to a recently set-up company based out of Delhi, already importing wines from Italy and Australia – Alpex Wines.

Headed by a husband and wife duo, I recently met the fairer half and gave her the real low-down on the industry. She was undeterred, if anything, she seemed more determined to crack it and crack it good. Our tasting notes will follow shortly.

Let’s just hope that they too are as virtuous and blessed as the witty Mr. Churchill who claimed to have managed to take more out of alcohol than it ever did out of him.

The Wi-Not blog is where you will find industry up-dates, links, recommendations, and discussions on issues that perplex all that enter the Indian wine industry. We hope you find it useful, and we hope you come back more often to read as also to contribute.