New Emerging Wine Market About to Open

by Wine Owners

Posted on 2012-06-28

“The consumption of wine throughout the Indian sub-continent and in Persia was common 1,000 to 1,500 years ago,” according to Chris Devonshire-Ellis, principal of Dezan Shira & Associates. “In more moderate Islam it was acceptable – in moderation – and the Sufi poet Rumi is well known for his verses comparing God with the delights of the grape. (Huffington Post).

So there is wine culture deep in the psyche of the Indian sub-continent. Imported wines in India currently attract a 150 percent tariff, in addition to duty of 4 percent. Taxes – at varying rates – are then imposed by India’s individual states. These vary from between 30 percent to 100 percent depending on the state, and have made India a wasteland for quality imported wines. Low-end brands that would retail elsewhere in Asia for US$12-US$15 typically cost upwards of US$50 a bottle.

Now a proposed deal with the EU would reportedly reduce import duties to 40 percent, boosting the sale of wines in many states.

India is a rapidly growing market and the demand will only get higher with the proposed changes. Like other areas of Asia, wine has grown immensely in popularity in India over the past decade, as a rapidly expanding middle and upper class can increasingly afford high value imported products. Wine imports have doubled over the last two years, and with India’s consumer markets expected to quadruple over the next two decades, the lowering of import duties is expected to have a significant impact.

The current trade negotiations between the EU and the Indian government have been going on for four long years but – finally – a deal looks about to be struck this year. This could have a dramatic impact on the global wine industry.

Any deal would see India slash tariffs on imported alcohol in return for an opening-up of the European market to India.

Don't expect a rerun of the China boom however. The experience with the Bordeaux First Growths boom and bust cycle during the period 2008-2012 should instill due caution into would-be drinkers, collectors and investors wherever they are.

China to Clampdown on Wine Fraud & Profiteering

by Wine Owners

Posted on 2012-06-26

The Chinese Ministry of Commerce recently issued a Standards document designed to legislate more effectively for the distribution & retail of wine.

Problems the document aims to address include; selling counterfeit product, harming the interests or health of consumers, false hype, misleading the consumer, lack of good faith & excess consumption.

'All levels of government and related departments attach great importance to this issue, have therefore issued a series of laws and regulations on alcohol production and management policies and systems, technical standards..'

Specific goals are:

  1. Develop distribution integrity of the alcohol industry, to promote its orderly growth;
  2. Equal protection of producers, operators and consumers' legitimate rights and interests - promote the rational consumption of alcoholic products. Advocate a culture of civilised drinking;
  3. Prevention and fight against fake goods, strengthen self-regulation and introduce provenance and tracking systems. Protect the legitimate rights and interests of consumers, to ensure that in the market to buy genuine wine;
  4. Promotion of alcoholic products, intellectual property and brand protection

Statistics show that China’s alcoholic drinks totaled 710.3 million hl in 2011 with output value of RMB 669.9 billion yuan and sales value of 648.9 billion yuan.

2 million Fraudulent Burgundy Bottles

by Wine Owners

Posted on 2012-06-15

Several directors of Labouré-Roi, the Nuits-St.-Georges negociant, have been arrested following a year's investigation by the French Fraud Squad (DGCCRF).

For several years, since 2005 through 2009, Labouré-Roi been accused of consumer fraud; systematically mis-labelling burgundies from village wines through to Grand Crus, blending juice inappropriately, and making false claims about fictitious competition medals.

Labouré-Roi is Burgundy's 3rd largest negociant by volume, and the fraud affects 2,000,000 bottles.

Quatre dirigeants de la maison de négoce en vins de Bourgogne Labouré-Roi, basée à Nuits-Saint-Georges (Côte-d'Or), ont été placés en garde à vue la semaine dernière dans le cadre d'une affaire de fraude sur les vins, a-t-on appris mercredi 13 juin auprès de leur avocat. Il leur est reproché des faits de "tricherie sur les étiquettes", des "mélanges de vins" et l'utilisation de "fausse médailles", selon le quotidien Le Bien Public qui a révélé l'affaire.

Does this spell the end of the Famille Cottin's ownership of the long-standing Maison founded in 1832 and acquired by them in 1974? Le Monde quotes the company's Counsel as fearing the worst if banks refuse borrowings following the scandal that has made headlines in France.

As Burgundy buzzes with interest & growing sales from China, stories of grand-scale fraud are the last thing the BIVB (Bureau Interprofessionel des Vins de Bourgogne) needs after all its excellent work educating Far Eastern buyers on the value ofClassification and micro-climats.

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