India winemakers tap growth as duties boost prices of imports(2)
Indian wine consumption will probably grow between 15 to 20 percent every year for the next decade, and Sula may outpace the industry, Samant said.
28 Different Countries
"We really dominate, at this point, India people's preference for good Indian wine," Samant said. "For every one bottle all the other wineries sell, we sell two."
Yet even Sula's cheapest wine is out of reach for most people in India, where 828 million live on less than $2 a day, according to World Bank estimates.
The World Trade Organization in 2008 called India's taxes "excessive" after the U.S. and European Union filed complaints.
Besides the 150 percent import duty, local governments impose excise duties. New Delhi, for instance, collects as much as 65 percent of an importer's declared wholesale price. The Customs Tariff Act imposes another 4 percent duty.
"The market here is fragmented, it's like operating in 28 different countries," Chandra said.
A bottle of 2010 Cloudy Bay Sauvignon Blanc sells for $114 at the Amber restaurant in Hong Kong's Mandarin Oriental Hotel, or 22 percent less than the price at the Hyatt Regency in New Delhi.
In Tokyo, it sells for 10,500 yen ($135) at the Grand Hyatt and 10,000 yen at the Ritz-Carlton. Cloudy Bay Vineyards Ltd. is owned by LVMH Moet Hennessy Louis Vuitton SA.
Tokyo is the world's most-expensive city, according to data compiled by the Economist Intelligence Unit in London. It's the second most-expensive city for expatriates, with New Delhi ranking 85th, according to Mercer's 2011 Worldwide Cost of Living Survey.
The EU is in discussions with India about reducing import duties, according to the European Spirits Organization.
"At the same price level, Indian wines are superior" to imported wines, Chandra said. "At 800-900 rupees, Sula's Dindori Reserve is an outstanding wine. Good grapes and good wine are good grapes and good wine anywhere."
--With assistance from Masaaki Iwamoto in Tokyo and Michelle Yun in Hong Kong.
