Interesting article in The Economic Times that more than half of the 58 wineries in the Indian state of Maharashtra have either closed down or have stopped producing wine due to the glut in the market.
“The vineyards are feeling the impact. Many farmers growing grapes are yet to receive payments for their supplies to wineries last season. And for the current season, where picking and crushing are currently under way, prices have crashed by a staggering 50%,” the newspaper reported.
Besides the international glut in wine, India’s problems are blamed and lavish incentives that drove up production to unrealistic levels for a country only starting to appreciate wine.
“France and Italy have an average wine consumption of around 60-70 litres per person a year while it’s 25 litres in the USA, 20 litres in Australia and 4 litres in China, whereas in India it’s just about 4-5 ml per person per year. ‘We were hoping to raise it. But that doesn’t seem to be happening, at least for now,’” a government official told the newspaper.
Poor winemaking is also blamed for the crisis.
“Wine producing is as much a craft as it is a business, and this is where many of the winemakers lost their way. The problem starts in the vineyards where most farmers cultivated wine grapes like table grapes, maximising output. Yet, wine requires the opposite approach, with relentless pruning and discarding of grapes so as to focus only on the best. Most of the vineyards ended up producing poor wine, which would have no chance in the export market, and even falls short in the developing domestic market.”
But all is not doom and gloom. “Yet, there are some winners in the business. Some producers, who took advantage of the government’s largesse, but set their own standards — and usually crushed and fermented wine in their own wineries and not in wine parks — are set to benefit in the long run. They are the ones poised to benefit from the opening up of the retail sector and from local demand, as and when it picks up again. Some are backed by large industrial groups like United Spirits, a UB Group company, and can afford to sit out the current crisis.”