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It's a pain to sell wine

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Producing wine is a joy and selling it a pain — ask any winemaker and wine company. To produce wine you’ve got to have good grapes, good processing facilities and a good winemaker to help turn the fruit into something you would be proud to serve. Of course, most of all you’ve got to have “Vitamin M”: loads of money, to pay for the setup and the grapes and the expertise.

The joy factor kicks in when the wine is good (I hesitate to say “great”, as that superlative should be reserved for the truly deserving). To swirl, sniff, sip and savour one’s own wine is a different kind of high — and of course your own wine simply tastes great. It’s like fruit from one’s own orchard, always divine.

In theory, producing wine is simple. You press grapes to extract the juice, ferment the sugar in the juice (using yeast as a catalyst) into alcohol, clarify the resulting mixture, and voilà, you have wine. That’s all very well if you’re making a few bottles of wine at home, but handling the stuff in tonnes is a different kettle of fish. For one, nobody treads the grapes any more — that’s only for the media photo-ops. Grapes are de-stemmed and crushed in a machine that spits out the stems at one end, a most convenient thing, as anyone who’s ever tried to de-stem grapes will aver. The juice is extracted in a pneumatic bladder press, which is far more efficient than the old basket press and a lot more hygienic. Lastly, the actual vinification is done in temperature-controlled stainless steel tanks. Few can afford oak barrels, which in any case are more useful for maturing the stuff than producing it.

In general, 1 metric tonne of grapes will give about 675 litres of wine — that’s a goodly 900 bottles or 75 cases of 12 bottles each. Figure on the grapes costing Rs 40 per kg, factor in the cost of production, and you’ll find that producing wine should vcost at most Rs 100 per bottle, including finance and depreciation.

But hello: I pay about Rs 500 a bottle for a halfway decent wine at retail prices, and up to three times as much in a restaurant. Where is all the cost coming from?

Well, there’s the cost of packaging material (bottles, labels, caps, etc.) and marketing costs and overheads, which together add Rs 120. So if a company sells a wine for Rs 250, it actually makes only Rs 30 per bottle. The rest of the retail price in a Rs 500-per-bottle wine is duties and taxes (about Rs 125 per bottle) and trade margins (Rs 75 per bottle). Of course, actual tax levels vary from state to state, so in Andhra Pradesh taxes push the MRP up to nearly Rs 760, whereas in Goa you would pay only Rs 360.

So, it is a pain to sell wine. Ask any company in the business. I get inquiries all the time about the business, and I always ask the same question: “Do you know how to make a small fortune in wine?” The answer, of course, is “Start with a large fortune!” If they’re still talking, then they are serious players and not just in it as traders.

Moral of the story? Stick to drinking wine. It’s easier on the pocket and a lot healthier.

Wines I’ve been drinking: The 2011 and Vindiva Reserve 2010, both Cab-Shiraz blends from Karnataka, at a lovely sit-down dinner at Caperberry Restaurant in Bangalore. The Vindiva Classic has firm tannins that presage aging potential, plus a good mouth feel and fruit; the Reserve is quite impressive, with lovely aromas of berries and spice, soft tannins, and a full-bodied taste that lingers.

Cheers!


Alok Chandra is a Bangalore-based wine consultant

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