Dum dum, it's the sound of my gun
Dum dum dum, honey what have you done?
Dum dum dum, honey what have you done?
Janie's got a gun, Janie's got a gun!.
The article reminded me of the above lines in the 20-year old popular song by Aerosmith: Janie’s got a gun. I can hear the sound of her gun but when I meet her in Hong Kong, I want to tell Jeannie, ‘honey what have you done?’ because with a Master of Wine under her belt, Jeannie sure has a gun!.
"So that means, inevitably, wine (interest) is growing." The main hindrance to a potential boom in India's wine market, given the rapid growth of a freer-spending middle class, is prohibitively high alcohol taxes in key cities such as Delhi and Mumbai, though taxes are lower in Delhi,’ reads the article from Reuter picked up by ET.
Whoa, whoa, whoa! Taxes are lower in Delhi! Which Delhi are you talking about, honey? ‘Cause the Delhi we live in, is choking and wine growth is dying a slow death because the excise duties are so ridiculously high. I hate to admit this about my home-town but the excise duty is a lot lower in Mumbai-and I mean a lot! No sense in going through the details-my readers are already bored with my continuous reporting and cribbing about it all the time. But all the facts are there on the website; customs duty is the same everywhere in India, being a central (federal) tax.
"Mumbai being the sort of business hub of India, even though there's close to 300% duty, people still drink. People still enjoy wine," Lee said according to the report. Who told you that, honey? After going berserk in 2007 for a year or so, Maharashtra proved that they are more with-it and reduced the duties substantially, especially on the super-premium wines (read expensive!). This year they made hard liquor and beer more expensive slightly but , may they live longer by drinking more wine, did not touch wine, so it continues to enjoy the same taxes, though Delhi increased the duties even more, especially on the medium and higher priced wines.
"So at the fine wine end of the spectrum, a lot of the Bordeaux chateau owners are telling me they're doing quite well in India, " she says. I would love to know which chateaux have told her- I am longing to hear those sweet words from the Bordelaise for many years now.
"From an economic perspective, because (of) the sheer number of people in India who are getting wealthier and who have traveled, and who are not strictly practicing a certain religion and are much more international, that proportion of the population in India is growing,"
Lee said , according to the article. I am always foxed for a moment when asked this question overseas about religion by producers and journalist alike when I meet them. It makes me wonder who is drinking away the 500 million cases of hard liquor and beer sold every year-against a total of 1.5 million cases of wine! There are people cutting across the political, religious and social lines everywhere and adding to the list of drinkers- some openly, others behind the curtain or a metallic container.
‘Given its status as a market with a huge population rivaling that of China, India's potential as a wine market looks just as exciting’, said Lee. This is a statement I cannot find any fault with. But only potentially!! In 20-50 years, we are surely capable of not only being a huge market because of increasing population, abundance of youth and the capacity of Indians to adapt to new aspirational products-be it mobile phones, cars or TVs but unfortunately our (federal and state) governments have lumped alcohol with wine and until the delineation happens ( happen it will-someday not so soon though) we are a handicapped lot-almost straitjacketed.
‘As soon the regulations are, if they are ever, relaxed, then there really will be a boom.’ Her operative word, I believe is, ‘if they are ever’. No denying that there will be a slower boom even with the existing duties, if regulations are relaxed. But until the government can delineate wine from alcohol, that is not going to happen.
‘Cash-rich emerging Asian markets, especially India, could see an explosion in wine consumption in the future - if their government scraps import taxes altogether, the way Hong Kong did in 2008, maintains wine expert Jeannie Cho Lee.’
I agree and was one of the first ones to have reported it on March 3 in delWine.’ But this would be a mere fantasy even though I share with her whole heartedly. We are not Hong Kong where they don’t produce wine. India has a growing domestic industry which will compete with China one day but if the taxes were waived totally today, the whole of the Indian wine industry would be wiped out overnight. We certainly don’t want that to happen.
It is only with WTO intervention and the EU threatening to sue the Indian government that customs duties were brought down but many states which have supreme powers according to Sec 47 of the Constitution of India in terms of taxation and the sales policy, immediately increased the excise duties including Maharashtra, Delhi and Karnataka, which had over 75% of the total wine market at that time in 2007.
There are talks of FTA going on between EU and India. Duties are expected to come down to 50% on more expensive wines from the present 150% if and when the treaty is signed. But how the excise duty issue would be handled by the states would still be an irritant X-factor.
I don’t want to sound like ringing the death knells for the Indian wine industry. On the other hand I maintain that the arrow has left the bow and the government cannot stop the process of growing wine culture. There has been progressiveness shown by the government and things have been moving ahead even though painfully slowly.
Unfortunately, the supply-chain pipe through which the wine flows from the producer to the consumer is narrow and fragile. It would be dangerous for a foreign producer to read into her lines and catch the next flight to India hoping to reap immediate benefits– many of them already come with high hopes, especially when their brands have certain clout in their domestic market or overseas but go back frustrated.
Marketing in India needs time and patience. There will be many stories of success in the coming decades. But the failures might well outnumber them. We need to tread cautiously and be much more realistic than the article suggests-even to an optimist like me.
Subhash Arora
** With apologies also to Debra Meiburg MW who is a Master of Wine of
the same vintage as Jeannie, I believe. She is a US citizen though living in Hong Kong for a couple of decades. |