The Hindu Business Line : Wine adds fizz to Maharashtra’s economy

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Home Page - Breweries
Industry & Economy - Economy
States - Maharashtra
Wine adds fizz to Maharashtra’s economy

Tourists picking grapes at a vineyard.

Amit Mitra

Wine is adding a new, sparkling fizz to Maharashtra’s economy.

Cottoning on to the heady business potential of wine production and export from Maharashtra, the State Government has uncorked a special policy for wine, becoming the first State in India to have such a policy.

And since then a burgeoning clutch of wine producers have poured in significant oodles of investment in the State’s wine casket, making Maharashtra the nation’s major wine hub.

With wine consumption steadily on the rise in the country and Indian wines finding increasing space on dinner tables abroad, Maharashtra holds out significant potential for new players to join the wine race.

Currently, the domestic market witnesses an overall sale of about six lakh cases a year, with table wines accounting for about 90 per cent of the market and expensive varieties of vintage wines the remaining 10 per cent.

Rise in consumption

According to industry statistics, the domestic wine consumption has increased from three million litres in 2003-04 to 7.60 million litres in 2005-06 and 11.25 million litres in 2006-07.

The Indian wine market is growing at about 30 to 40 per cent and is expected to maintain this pace for the next five to six years. The big names in the wine production industry include Indage, Sula and Grover Vineyards.

“The trend facilitating wine consumption in India is that it is in fashion and considered a healthy beverage with low alcohol content. This has led to the launch of wine clubs in many cities in India, including Delhi, Pune, Bangalore and Hyderabad,” an industry representative said.

Higher production

Processing of grapes at Sula vineyard at Gangapur in Nashik.

Wine production in Maharashtra has been on the rise from 2003, when the State produced three million litres. The next year it topped with a production of 5.4 million litres, which bloated up to 9.4 million litres in 2006 and expected to cross 13 million litres this year. Last year, exports from the Maharashtra vineyards were 0.45 million litres, the major export destinations being the UK, the UAE, the Netherlands, Sri Lanka and the other European countries.

The major districts in the State where wineries are being set up are Nashik, Sangli, Pune, Usmanabad, Buldhana and Solapur.

What nudged up wine production in the State is the Maharashtra Grape Processing Industrial Policy unveiled in 2001, which gave all units in this segment the status of food processing industry and 100 per cent exemption from excise duty for ten years.

Indeed, among all fruit crops, grape is considered to be a major crop in India, with a total of 60,000 hectares under cultivation and an annual production of about 16 lakh tonnes.

In Maharashtra, the total area under grape cultivation is 40,000 hectares, clearly indicating the State’s march ahead in this sector.

Its annual production of grapes is in the neighbourhood of 11 lakh tonnes.

How did grape cultivation actually lead to wine production? A senior official of the Maharashtra Industrial Development Corporation (MIDC) said earlier due to natural calamities or abrupt changes in weather conditions, the quality of grapes produced in the State was often affected to some degree. This led to farmers having to settle for lower prices for their exportable grapes, as also in the local market — sometimes the average price realised by the farmer was below Rs 8 per kg.

The ubiquitous middlemen made the situation worse for the farmers and there were several instances when the farmers did not even receive the cost of production for the grapes they sold.

More than 15 by-products are made from grapes, including raisin (the State produces about 50,000 tonnes of this product annually), squash, syrup, jam, jelly, vinegar, pickles, tartaric acid, cattle feed and tannin.

It was this situation that prompted the planners to think of other value-added products and they finally zeroed in on wine.

It was noticed that if the farmers in the State cultivated particular types of wine grape varieties, which could be used to produce good quality wine, they got good prices for their crop.

Keeping this in view, the Union Government announced an agri export zone for the Nashik, Sangli, Pune, Solapur, Ahmednagar and Satara region for grapes and grape wine Park in Maharashtra.

The concept of AEZ is to take a comprehensive look at a particular produce located in a contiguous area for the purpose of developing and sourcing the raw material, processing, packaging and preservation, leading to export of the produce and other value-added products. And to give a further impetus to this development, the Maharashtra Government, on its part, came out with the Maharashtra Grape Processing Industrial Policy.

As part of this policy, MIDC was asked to develop the Godavari Wine Park at Vinchut in Nashik district and Krishna WinePark at Palus in Sangli district.

The MIDC’s role was to provide land to entrepreneur at reasonable rate and to provide infrastructure facilities.

In the Nashik wine park, for example, 63 plots were offered initially, while in Sangli another 49 plots were developed for winery activities, the average plot size being 2,000 sq m in both the parks.

To further facilitate grape production by farmers, a grape processing and research institute was set up in the Krishna Wine park, which gives training to farmers to cultivate wine grape varieties, set up nursery of grape wine varieties, set up quality control laboratory for wines and imparting blending techniques.

For example, to produce sparkling wine (called champagne in France), Chardonnay variety of grape is required, while for fortified wine (sweet or desert wine) the Symphony, Tinta Madera and Muscat gape wine varieties are required. MIDC has also signed a MoU with wine manufacturers from Italy, France, Germany and South Africa for nursery management and viticulture infrastructure.

As farmers turned to cultivation of wine grape varieties, the extent of land under this cultivation in Maharashtra increased to about 4,500 acres, which is increasing as new grape wine units come up.

At present, there are 51 grape wine units in the State, including 28 in Nashik, 8 in Sangli, 9 in Pune and 3 in Solapur. “Since we announced our policy in 2001, every year an average of seven to eight new wine units went into production in the State,” the MIDC official said.

He said the total investment in wineries in Maharashtra was Rs 160.31 crore in 2006 and Rs 247.71 crore so far this year. The global wine production is estimated at 32,000 million litres and is rising every year, the major producers being France, Italy, Spain and Germany.

India at present imports 72,000 wine cases (each case consists of about nine litres), out of which 32,000 cases are bottled in origin and the rest imported in bulk flexi bags and subsequently bottled by Indian wineries.

In France and Italy, per capita consumption is 60-70 litres a year, in the US it is 25 litres and China four litres, while that in India is literally a sip of nine to 10 ml. A MIDC report clearly points out that there is still huge potential for the wine industry in the domestic market itself. “The wine industry in India is in its nascent stages now and it is necessary to follow quality parameters, which will go a long way in making Indian wines a (popular) brand in the international market.

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