The Rise of Wine and Spirits in India
India’s drinking culture is evolving. Traditionally known for its whisky consumption, the country is now embracing wines and other spirits. This shift is not just a trend; it represents a significant change in consumer preferences. As the market moves towards premiumisation, companies like Moet Hennessy India see a golden opportunity for growth. With potential free trade agreements (FTAs) on the horizon, the landscape for foreign liquor could become more favorable, making it easier for consumers to access a wider variety of beverages.
Changing Tastes: From Whisky to Wine
Historically, Indian drinkers favored whisky, often enjoying it straight or with a simple mixer like tonic water. However, Ipsita Das, Managing Director of Moet Hennessy India, notes that this is changing. “Indians used to drink straight ups earlier—whiskey on the rocks or just a gin and tonic. Now the format of consumption is changing here,” she explains. Wines and spirits are becoming mainstream, reflecting a broader acceptance of diverse drinking options.
This shift towards premiumisation is particularly beneficial for Moet Hennessy, which specializes in luxury beverages. The company has seen a notable increase in demand over the past three years. Das mentions that even tequilas are gaining traction among Indian consumers. This trend indicates a growing sophistication in the Indian palate, with consumers eager to explore new flavors and experiences. The rise of wine and spirits signifies a cultural shift, as more people are willing to invest in quality over quantity.
The Impact of High Taxes on Foreign Liquor
Despite the growing interest in wines and spirits, high taxes pose a significant challenge for foreign liquor companies in India. The taxation system is complex and varies from state to state. “Wines and spirits in India is a very complex topic,” Das states. Unlike many other countries, liquor does not fall under the Goods and Services Tax (GST) in India. Each state has its own regulations, which can change frequently, complicating the business landscape.
India imposes a staggering 150% customs duty on imported liquor, one of the highest rates globally. Additionally, state taxes further complicate pricing. For instance, a bottle of Moet & Chandon that costs around 45 euros in Europe can retail for approximately 100 euros in India, depending on the state. This disparity creates challenges for consumers who are increasingly well-traveled and aware of international pricing. They often find it hard to reconcile the high costs with their experiences abroad.
The Future: Opportunities with Free Trade Agreements
Looking ahead, the potential for free trade agreements (FTAs) could significantly alter the landscape for foreign liquor in India. Das highlights ongoing discussions about FTAs, particularly with the UK. “We really hope that an FTA will be able to give some relaxation in India over time, which could really boost consumption,” she says. If successful, these agreements could lower import duties and make foreign wines and spirits more accessible to Indian consumers.
Moreover, the rise of Indian-made wines is noteworthy. Moet Hennessy produces both still and sparkling wines under the Chandon brand in India. Das reports that these wines are performing well in the market, indicating a growing appreciation for locally produced beverages. As Indian consumers become more adventurous, the demand for both imported and domestic wines and spirits is likely to increase.
Observer Voice is the one stop site for National, International news, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.