Wine importers in India face significant challenges despite paying steep customs duties and excise taxes, as they struggle to find reliable and supportive retailers. Even after investing heavily to bring prestigious BOI (Bottled Outside India) wines from regions like France and Italy, importers often encounter exploitative retail practices, including demands for high marketing fees, shelf space charges, and delayed payments. These issues shrink profit margins and strain operations. Furthermore, retailers frequently lack trained staff or proper storage conditions, leading to poor wine presentation, degraded quality, and limited consumer engagement. To build a thriving wine culture, retailers must treat imported wines with care—offering proper display, informed staff, and respectful partnerships with importers.
Challenges
for
Domestic Wineries and Wine Importers
Challenges for
Domestic Wineries and Wine Importers
Despite growing interest in wine across India, domestic wineries and importers still face several roadblocks. These challenges hinder smooth market access, visibility, and long-term scalability in the retail landscape.
Exploitation by
Retail Groups
As a result of exploitative retail practices, wineries are unable to reinvest in critical areas such as brand promotion, R&D for new blends, or sustainable packaging—initiatives that demand substantial financial resources. This vicious cycle particularly affects smaller players, stifling innovation and threatening the industry's ability to adapt to evolving consumer demands. Retailers often impose unreasonable charges or demand cash incentives for premium shelf space and promotional visibility, making it nearly impossible for emerging brands to compete. While larger players secure dominant placement through hefty monthly rentals, smaller wineries struggle with limited visibility and restricted market access. This entrenched favoritism not only undermines fair competition but also narrows consumer choice, ultimately hindering India's wine industry's growth and diversity.
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Unjustified Schemes:
Retailers often demand untenable promotional schemes, such as "Buy One Case, Get One Free." Even worse, they attempt to extract government taxes applicable on the free cases, pushing the financial burden entirely onto the wineries/importers.
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Pocketing Consumer Discounts:
These schemes are rarely passed on to customers, allowing retailers to pocket the benefits, which erodes trust in the market and creates an unfair advantage for retailers.
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Protectionism for Existing Portfolios:
Retail groups often block innovative or new products, claiming they clash with their existing brand portfolios. This stifles competition, prevents market innovation, and forces smaller players to exit the market.
Current Challenges in Wine Retail
Wine centres are increasingly necessary due to the pervasive exploitation by monopolistic retail groups and associations, which have created an unfair and unsustainable ecosystem. Exploitation by Retail Groups The formation of powerful retailer groups, comprising networks of 5 to 80 shops, has placed small wineries and wine importers in a precarious bargaining position. Leveraging their collective purchasing power, these groups exploit wineries by demanding deep discounts and unviable promotional schemes, leaving producers with minimal margins. This coercive dynamic forces wineries into a corner, compelling them to prioritise short-term sales over sustainable profitability
- Powerful retailer networks (5 to 80 shops) dominate the market, limiting small wineries' bargaining power.
- Retailers force wineries into deep discounts and unsustainable promotions, reducing profitability.
- Wineries are pressured to prioritize immediate sales rather than long-term business sustainability.
High Costs of Promotion and Marketing
WRC isn't just a store—it’s an experience. Interactive zones invite customers to taste, learn, and connect with wines through curated tools and displays.
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Phenomenal Display Fees:
Retailers charge exorbitant fees for promoting products, displaying point-of-purchase (POP) materials, or arranging tastings. "Liquid schemes" or discounts in kind are often demanded under the guise of rentals.
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Counter Sales Commissions (CSM):
Sales personnel only recommend products if wineries/importers provide them with commissions. This practice skews fair competition and inflates the operational costs for wineries and importers.
Payment and Financial
Pressure
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Delayed Payments:
Many retailers delay payments despite having sold the inventory, causing wineries/importers severe cash flow issues. Deliberate delays are often a tactic to extract further discounts, leaving producers with minimal profit margins. -
Unviable Profit Margins:
With retailers absorbing most of the profits, wineries and importers struggle to sustain their businesses, leading to closures.