A wine story loses its sparkle

With govt doling out lavish incentives,a total of 72 wineries came up in Maharashtra by 2008. Three years on, around 30 have shut shop with production exceeding demand.


IN the year 2008, Nashik,a district in northwestern Maharashtra known to produce quality grapes, earned a sobriquet that of the ‘wine capital of India’. None could contest that as of the total 79 wineries in the country, Nashik alone had 34. Its contribution, along with that of neighbouring Pune and Solapur, made Maharashtra produce 95 per cent of the country’s wine in its 72 wineries.

Observers said whatever was happening in Maharashtra, especially Nashik,was nothing short of revolution and the wine movement in the state will catch more sparkle with the passage of time.

But today, in 2011, barely three years later the phenomenal wine story has gone sour with more than 40 per cent of the wineries shutting shop.

“As of now,about 28-30 wineries of the total 72 have stalled production completely. Around 20 are functioning at 70 per cent of their crushing capacity and a dozen at 20-30 per cent of the crushing capacity, informs Secretary, All India Wine Growers’ Association, Rajesh Jadhav.

Consequently, the wine grapes that were produced on over 9,000 acres in 2008, now cover only 5,000 acres of land in Maharashtra.

Most of the farmers who had switched to wine grape farming, have returned to growing table grapes.

“It’s unlikely that anybody from our village would grow wine grapes in the near future. For the first two-three years we made good money but things went awry soon. No winery owner was ready to buy the grapes. We had to junk a lot of them,” said Amit Patil,from,Dindori in Nashik District.

Jadhav, who has stalled crushing at his winery in Nashik,wants growers to be cautious. “We have told them that they should plant wine grapes only after a winery asks them in writing to do so,” he says.

The downfall

Though the Grape Processing Industry Policy in 2001,till year 2003-04 there were only half a dozen wineries in the state with Indage and Sula being the leaders. Nashik, in 2001,had just one winery.

The efforts to boost the wine industry with subsidies,easy loans,easy licensing and promotion of wine culture started bearing fruits in 2005. In next three years,new wineries came up in the state and by 2008 the number stood at 72.

“We thought we had hit the jackpot. We were making good money. Everybody around us was moving to wine grape farming. In my village itself, four wineries were set up,” said Rajesh Patil, a farmer from Abhona village from Kalwan taluka Nashik who had planted wine grapes on his 12-acre plot, but has now gone back to growing table grapes.

Almost all newly established wineries were owned by rich farmers from Nashik and Pune districts who had little or no knowledge about marketing. They had made a foray into the business with the aim to avail the benefits of government subsidies and make the most of the wine boom.

“Government assisted in setting up the wineries,it assisted in production, but gave no assistance in marketing. With increased number of wineries. the production exceeded the demand in the state. The consequence,obviously,was a glut,” said Mahindra Shahir, president, Maharashtra Grape Growers’ Association.

Then came the 26/11 terror attacks in Mumbai which cut down the flow of tourists. The global meltdown followed made things worse.

“Though the recession had little impact on India,the major wine producing countries like Australia,South Africa and European nations were severally hit. While India had somehow survived the recession, these countries started sending their unsold stock of wine to India at throwaway prices. This resulted in the piling up of stocks of wine produced in local wineries. Now,the wineries couldn’t afford to crush fresh grapes having neither the storage facilities nor could they afford to store the wine. And they had to repay the loans,” said S D Shikhamany,former director, National Research Centre for Grapes, Pune.

Wine grapes,having no other use than making wine,remained in the fields and rotted. The losses of farmers ran into several lakhs per head.

“Winery owners had already invested Rs 1.5 crore to Rs 5 crore to establish a winery. They didn’t have the financial strength to wait for years and let the wine mature. The banks were running after them for recoveries. Farmers were asking us to buy fresh grapes while the wineries had no buyers for the wine produced in the last season,” said Shahir.

Many winery owners were forced to breach the contract with grape growers.

Next season, farmers chopped of the wine grape shoots of varieties like Shiraz, Merlot and Chardonnay and grafted the rootstock with table grapes varieties like Thompson Seedless and Sonoka.

Little hope of a high

Experts say that the chances of local wine industry gathering the lost momentum are bleak.

There are several hindrances. Firstly,Indian wine cannot compete at the international level and has a limited domestic market. In India,though wine-culture is slowly catching up,the per capita consumption of wine remains dismal,at 9 ml per person,as compared to 25 litres in the US and 20 litres in Australia.

The quality of most varieties of the wine produced in the country doesn’t match up to the quality of wine that is in demand in the international market.

“The basic rule in wine making is that lesser the yield at the vineyard,the better the wine produced from such grapes. On the contrary,the local wine-grape growers take as much production as they can to earn more profit. A high yield is a major reason for the low quality of Indian wine,” said Vijay Vangane, a winemaker for over 20 wineries in the state.

Another reason for the Indian wine not making the cut at the international market is the popularity of reserve wine the wine that is matured for many years by storing in oak barrels.

Almost no wine producer in India has the infrastructure to mature the wine for years. Most of them are desperate to sell it off as soon as they distil it after crushing. They simply cant afford to wait,” said Vangane.

Experts say that if large private firms with strong financial and marketing arms enter the business,these problems can be resolved.

But till now, barring a few exceptions,large firms have abstained from entering the business.

Another major hindrance is the different wine policies of different states. In most of the states,wine is counted as liquor and it’s import,even from fellow states,attracts heavy excise duty. This discourages the growth of growth of the industry in production of state.

“States like Maharashtra and Karnataka have come up with good wine policies. Today,Maharashtra is producing wine in excess than its need but it’s difficult to market it. Even the state government can do little outside the state. For the wine business to flourish and attract farmers towards it by earning the dividends,we need to have similar wine policy (like Maharashtra and Karnataka) at the national level,” said Shikhamany.