With the wine market growing consistently at 14 percent for the last five years, India has emerged as a promising playing field for winemakers all over the world. Noted wine brands want to explore this lucrative market and are looking for ways to enter and gain a strong foothold. However, importing wine to India requires thorough research of the market to fully understand how it functions.
Importing Wine to India: How Does It Work
Alcohol is a state subject in India and free movement of alcoholic beverages across state borders is prohibited. All 28 states in the country have independent laws related to excise duties, vend fees, value-added tax (VAT), label registration costs and route to market. So, knowing rules and regulations related to importing wine in one state might not work for others and exporters will have to start all over again.
The federal government has implemented a three-tier system to regulate wine production, importation, distribution, and retail sales in the country to prevent monopolisation. Here’s how it works:
Tier 1- Importers: Responsible for the physical import of stocks, payment of customs duties, collection of orders from an excise wholesaler for onward supply, label registration formalities in each state, physical movement of wine through various states etc. Another important role that importers play is deciding the final retail price of the wine and registering it accordingly.
Tier 2- Excise Wholesalers: These are private or government-owned dealers registered with the excise department of different states who are primarily responsible for paying of excise duties, vend fees, physical supply of stock to retailers or HORECA (hotels, restaurants and cafes) and collection of payments from the same.
Tier 3- Retailers: Retail stores with government authorised licenses are responsible for sales and delivery of wines to consumers. Although it is importers who calculate and register the retail prices of wines, retailers are the only players in this system who are allowed to publish them.
Tips To Successfully Enter The Indian Market
1) Choose the right importer: Find an importer who understands both the Indian market and your product and whose thought-process syncs with your own. A good importer will have a wide distribution network and great financial resources, but the one will know the target consumer base for your product and ensure that it reaches them.
2) Hire a wine consultant: A wine consultant will introduce you to the various moving pieces of the Indian import structure and help you navigate its various tiers efficiently. They can connect you to potential import partners, help you navigate the regulatory framework in India and brief you on consumer trends, among other things.
At SoHoWines Consulting LLP, we provide consultancy, marketing and communication services which combine knowledge, thought leadership, consumer and trade outreach programs and effective digital marketing campaigns to help wine brands enter the Indian market with great confidence. Click here to know more.
3) Solid market research is the key: To help international wine companies enter and succeed in the Indian market we have launched the India Wine Insider. This comprehensive report helps exporters understand the import structure across different states and navigate the regulatory framework with self-reliance. It also brings an authoritative wealth of knowledge and expertise to exporters who intend to develop a strong nexus with all the important stakeholders in the Indian wine market.
Click here, if you’d like to gain access to this exhaustive white-paper report on the Indian wine market.
