by Subhash Arora

India’s major wine producing state, Maharashtra, has produced a record vintage, with the volume up by 60% and production up over 40%. The increase is due to new acreage at India’s existing wineries, plus the emergence of several new wineries. The latest figures released Maharashtra indicate a record 21m litres of wine was produced this year in 57 wineries, as compared to 13m litres last year.
“Six new wine projects at Nashik, Pune, Sangli and Buldhana produced 0.7m litres," says Jaideep Kale, technical coordinator of Grape Wine Parks for the Maharashtra Industrial Development Corporation, MIDC, the apex body facilitating production by investing $80m (€51m) in infrastructure alone.

About 8,000 acres of land are now under cultivation for wine production, according to Kale, with the state of Maharashtra producing over 90% of India’s wine grapes.

Sula Vineyards, the leading premium wine producing company, harvested 4500 tons, almost twice as last year, including grapes produced by contracted farmers. This is enough to produce over 320,000 cases; Sula sold around 175,000 cases in 2007-08.

Bangalore-based Grover Vineyards, which has also worked with Michel Rolland since it began, also clocked up 30% increase over previous year. Says director Kapil Grover, “We have just finished crushing a total of 1500 tonnes, of which 300 tonnes are in Maharashtra.”

While production is growing, sales have not kept pace. Although more markets and marketing channels, such as retail and the supermarkets, are opening up, and there is even optimism that the government will allow wine to be sold on airlines, the current market for Indian wines is only about a million 9-litre cases, compared to the 21m litres being produced. Even with the projected tripling of current consumption over three years, there is still likely to be excess wine in the system.

Exports are rising steadily but at a slow pace, says Kale. From 274,000 litres in 2003-04, Maharashtra has doubled its exports, not enough to pick up the excess.

Unsold wine cannot be stored in tanks indefinitely, especially when they would need to be emptied when the next harvest is ready and in any case, the majority of Indian wine is meant for drinking when young. With more reasonably priced imports entering the market, the pressure from imported wines is expected to mount. There is the likelihood of price reductions and a bigger market for the low-end, value-for-money foreign wines.

But liquidating higher inventories will continue to be a bigger challenge for most producers, who are celebrating the 60% increase in production.