India's Shift from Whisky to Wine

Traditionally a whisky-drinking nation, India is witnessing a growing inclination towards wines and other spirits. This shift towards premiumization presents a significant growth opportunity for Moet Hennessy India, a subsidiary of the world's largest luxury group, Louis Vuitton Moet Hennessy.

Once free trade agreements (FTAs) with the UK and other countries are signed, the duty structure on foreign liquor is expected to become more affordable in India, further boosting demand, according to Ipsita Das, Managing Director of Moet Hennessy India.

The Rise of Premiumization

Das noted that the format of consumption in India is changing, with wines and spirits becoming mainstream. This trend of premiumization is here to stay, providing an advantage for Moet Hennessy as the only pure play luxury player in this segment.

On a smaller scale, tequilas have also gained popularity in India. However, steep pricing due to high taxes remains a challenge for foreign liquor companies.

Taxation and Market Complexity

The wine and spirits market in India is complex due to state-specific regulations and policies, which add to the difficulty of doing business. India levies a 150% custom duty, one of the highest in the world, along with varying state taxes.

Despite the Indian consumer being well-travelled and aware of the price differences due to duty and taxes, companies find it challenging to set expectations. Das hopes that ongoing FTA conversations, such as with the UK, will lead to relaxation in duties over time, boosting consumption.

Indian Wines on the Rise

Indian wines, both still and sparkling, are increasingly popular. Moet Hennessy India produces these under the name of Chandon, and they are performing well in the market, according to Das.