High import duties may hit Italian wine exports

By Sushma Ramachandran

SIENA (Italy), OCT. 31. Italian wines may soon be easily available in India, but the cost could be daunting for ordinary consumers. This seems to be the only fly in the ointment since the wine industry in this Mediterranean country is keen on supplying a wide range of wines to the Indian market. But it may not enter in a big way till the extremely high duty structure is reduced substantially.

According to representatives of the Enoteca Italiana, a national association meant to promote the Italian wine industry, a bottle of wine costing about $ 4 to $ 5 (about Rs. 200 to Rs. 250) here would ultimately have to be priced in the range of Rs. 1,000 to Rs. 1,500. The exact cost would depend on State levies as some, like Maharashtra, have imposed additional luxury taxes on imported liquor recently, making the mark-up even higher. As a result of the intricate taxation structure, which includes import duties, additional surcharges and local sales taxes, wine drinking could remain an elitist pastime in the Indian market.

Despite these problems, the Italian wine industry remains quite enthusiastic about export to India with the Zonin brand having already been launched recently. The Fiere de Verona, an Italian trade organisation, is also planning promotional events in the coming months to focus on the need to link wine drinking to consumers. In addition, there will be two events in March next year in Delhi to promote wine and food products.

The president of Enoteca Italiana, Mr. Flavio Tattarini, told a group of visiting Indian journalists that the Italian wine industry is seeking to diversify its market in view of the vulnerability of the export business. Though exports are virtually booming over the last few years, it is felt that the new emerging markets must be developed and reinforced to provide a cushion to the industry in the long run. India as well as China, Korea and states of the U.S. have been identified as the new target markets. The industry was enthused that quantitative restrictions on imports of food products such as wine were removed in April this year. At the same time, import duties were hiked from the earlier level of 100 per cent to around 350 per cent and even higher in some States.

Mr. Tattarini said the purpose of this national association was to promote not just wine consumption but the ``culture of wine'' and the culture of each wine producing region. It represents 450 Italian wine producers though there are as many as one million producers in this country with an annual production of 52 million hectolitres.

Of this, 17.4 million hectolitres is exported of which 67 per cent goes to the U.S., Germany and France. One of the reasons for the focus on new markets, he said, was because the percentage share of this market had fallen from 67 to 64 per cent in 2000. In actual volumes, exports have risen from 8.8 to 11.1 million hectolitres, but the relative importance of these markets is declining, though marginally.

He said the association would try to help small and medium producers who were interested in exporting to India but did not have sufficient infrastructure. Other large companies such as Banfi s.p. and the Consorzio del Vino Brunello di Montalcino, which produce among the finest Italian wines, may not require such support, but the smaller consortia in various regions would need this help in promoting their wines in India.

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Section  : International
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