Wineries target growth in India’s middle class

DESPITE substantial tariffs on wine imports, several WA wineries have started exporting to India to meet growing demand for luxury consumer goods.

Sandalford Wineries has been successfully exporting to India since 2000 with a view to long-term market growth.

Sandalford proprietor Peter Prendiville said the company spent time assessing the market before partnering with United Breweries, one of the largest distributors of wine and liquor in India.

“We started off sending a container to them two and a half years ago, and we have worked with them in terms of training staff since,” he said.

“Senior staff have been doing training trips to India and we also do teleconferencing.”

Mr Prendiville said developing good relationships with business partners, and patience, were the keys to doing business in the region.

“India is exactly the same as China in some respects. You have to be patient, you have to be relevant and you have to be prepared to be in it for the long term,” he said.

“We are with the right partners and we are with the right people and we feel that there is huge potential.

“We have very good relationships with our customers in India.

“Wine isn’t foreign to them, but we must be prepared to spend the time and effort in training and education of your distributors.

“We are very serious about building the brand with a long-term view, the way that larger wineries may not be able to.

“We’ve been lucky – our objectives have been fulfilled.”

However, Mr Prendiville said the substantial tariffs on wine imports to India, which can range from 149.6 per cent to 264 per cent, would prevent other wineries from entering the market.

“They have a very high taxing regime [with regards to wine imports] that impacts on their ability to bring in a reasonable amount of wine,” he said.

Lower import duties on wine would encourage other WA producers to export to India and would increase revenue to Sandalford, he said.

“We expect to export between 5,000 and 6,000 cases if nothing happens [with the lowering of import duties], if something happens, we could add zeros to that figure,” Mr Prendiville told WA Business News.

“In 10 years’ time, I think it’s got the potential to be a very large market for us.”

Leeuwin Estate wineries had also recently sent a small order to India after being approached by an Indian distributor.

“We were approached about three months ago by a distributor looking for a top premium wine,” Leeuwin Estate managing director Trish Horgan said.

“We asked them to do a projection of what they see for the next five years, and we were very happy with that.”

Wine Association of Western Australia CEO Sarah Dent said some WA wineries had begun to explore export opportunities in India as interest from distributors grew.

“India is certainly a market with a great deal of potential,” she said.

“There are several strips of five-star hotels that attract high-end consumers that our product appeals to.

“A delegation of Indian investors were to come across in May but had to cancel due to SARS, so we are hoping to get them out here in May.”