NEW DELHI: Primarily whisky drinkers, Indians are now increasingly taking to wines and other spirits too. The market here is seeing a shift towards premiumisation, which Moet Hennessy India – a part of the world’s largest luxury group Louis Vuitton Moet Hennessy – views as a big opportunity to grow here. And once in-the-works free trade agreements (FTAs) are signed with the UK and more countries, the duty structure on foreign liquor will make it more affordable in India, giving demand a further fillip, Ipsita Das, Moet Hennessy India MD, told TOI.
“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. Wines and spirits have become very mainstream today. The story of premiumisation is here to stay.” That is an “advantage for us as Moet Hennessy is the only pure play luxury player in this segment, and premiumisation has given us a boost in the last three years. On a smaller scale, we’ve also seen tequilas gain popularity,” she added.
However, steep pricing due to high taxes in India remains an issue for foreign liquor companies. “Wines and spirits in India is a very complex topic. It is a state subject and doesn’t come under GST. Every state has its own regulations and policies which keep changing. That clearly adds to the lack of ease of doing business in this segment,” she added.
“When it comes to duty, India levies a 150% custom duty which is one of the highest in the world. Then there are state taxes, which also differ from state to state. With all this taxation, there’s very little parity which makes it difficult for the consumers because they buy a bottle of Moet & Chandon in Europe for 45 euros. But the same costs 100 euros in India, plus or minus 10%, depending on which state you are drinking it in,” she said. With the Indian consumer being very well-travelled now, it is not easy for companies to “set expectations” despite the fact that the former knows the same is due to duty and taxes here.
“There have been some very active FTA conversations going on, such as 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.” Das said.
Like Indian whisky, made-in-India wines are also becoming increasingly popular. Moet Hennessy India makes both still and sparkling wines here under the name of Chandon. How are they doing? “Our Indian wines are doing very well,” Das said.
