The Vijay Mallya-promoted UB Vintners, which has announced plans to set up India’s largest vinery, Four Seasons, to produce an eponymous brand of wine, plans to open a chain of wine bars across India to promote the brand. The vinery will start production in September, and the first of the wine bars, according to Abhay Kewadkar, senior vice-president, UB Group and chief wine maker, Four Seasons, will open in a metro in 2008. The company, he added, would roll out its own and franchise stores to retail wine across the country.
The competition is taking Mallya seriously. Wine market leader Champagne Indage is in the midst of a capacity expansion exercise that will increase its capacity to 10.5-12 million litres a year in the next few months, from 5 million litres now. The company is also taking advantage of a recent decision by the Maharashtra government to allow wine to be retailed through stand-alone stores, which are far easier to open (in terms of securing permission) than liquor stores, and even through grocery stores.
Champagne Indage will open 500 wine shops in Maharashtra over the next year and extend its reach to Madhya Pradesh and Goa soon. “We expect to end the current year with sales of 6.6 million bottles of wine in the domestic market,” said Santosh Verma, executive vice-president, sales and marketing, Champagne Indage.
UB’s five-million-litres-a-year vinery is coming up in Baramati, the pocket borough of India’s agriculture minister, Sharad Pawar, and there have been reports that the Pawar family would be a shareholder in the venture. Pratap Pawar, the younger brother of the minister, who runs the Sakal newspaper in Pune, said that the family wasn’t yet a shareholder in the venture. A source close to the developments said, on condition of anonymity, that the Pawars would acquire a stake in the venture in the next two weeks.
UB Vintners, in which the UB Group’s United Spirits will eventually have 51% stake, plans to grow the consumption of wine in India by retailing some of its products at prices much below that of existing brands.
“The products are highly priced, so wine-drinking remains a largely urban phenomenon,” said Kewadkar. The company also plans to offer premium wines. In July 2006, it acquired Bouvet-Ladubay, a French company that makes three million bottles of wine annually. “We will be in the entire range from economy to premium and sparkling wines and supplement this with a selection of fine foreign wine,” Kewadkar added.
India’s one-million-case-a-year (12 million bottles) wine market has been growing at 35%, riding high on a booming economy and a growing fascination with wine.
Maharashtra is a major producer of grapes, especially in the Nashik-Sangli-Baramati belt. Farmers here view grapes as a profitable cash crop, and a clutch of small vineries have come up in the region in the past five years.