As EU wines get cheaper, Fratelli braces for a tougher fight on Indian shelves

India currently imposes a high tax of 150% on imported wines. According to the official statement of the European Commission, under the agreement, this rate will decrease to 75%, and eventually to 20% for premium wines and 30% for mid-range wines. The phased reductions are expected to narrow the price gap between French, Spanish and Italian wines and locally produced brands.

The narrowing of the price gap worries domestic wine producers; They say imported brands have an attractive appeal even at similar prices.

“If there is a French wine at a similar price to a bottle of Indian wine, even if it is lower, one will tend to choose that,” said Gaurav Sekhri, founder of Fratelli Vineyards. Mint.

He warned that local brands risk losing visibility before consumers even try their products. “After all, you have to get the person to try the liquid to make a choice. But even if they don’t try it…”

Sekhri said low import duties could make it harder for Indian wines to maintain shelf space, as European brands try to reach India’s small but growing consumer base amid a slowing alcohol consumption in their markets.

While tariff cuts are now a reality that producers must adapt to, he acknowledged that potential impacts could extend beyond wineries to grape farmers connected to the industry. Fratelli has about 1,400 acres under active cultivation in Maharashtra, including Sholapur and Jambhali.

premium pivot

To counter increasing import competition, Indian wine producers are moving higher up the value chain. This change is already visible at Fratelli.

Sekhri said the company has seen clear growth in its luxury portfolio within its broader premium offering and views this trend positively as consumers shift towards higher quality wines.

Fratelli Vineyards reported gross revenue ₹rose to 130 crore in FY21 ₹204 crore by FY25. About 67% of its revenue now comes from its premium and above portfolio, while only 23% comes from the value category, signaling a greater focus on high-end wines. The remaining 10% comes from ready-to-drink wines.

This week, the company launched Sette 15 Anniversary, a 15-year special edition luxury wine in collaboration with designer Manish Malhotra. He is also working on two other wines, premium and above.

Erratic policies

Sekhri said India is still not as globally known for wine as it is for products such as tea or rice, making domestic brands more open to imported competition.

While acknowledging the central government’s efforts to protect the sector, he pointed out unequal policies at the state level. Rajasthan and Haryana still need to do more to support domestic wine, he said, adding that Haryana currently has the cheapest wine prices in the country.

Fratelli posted three consecutive years of double-digit growth after Covid, making current single-digit growth seem subdued by comparison. “The good news is that we will grow this year too,” Sekhri said.

The Confederation of Indian Alcoholic Beverages Companies (CIABC), an industry body representing a number of Indian alcohol companies, said it has asked state governments to withdraw excise concessions on imported liquor. The lobby group warned that cuts in tariffs under the India-EU trade framework could further harm Indian products in both spirits and wine categories, creating a potential double whammy for domestic companies.

Market dynamics

According to Sekhri, Fratelli currently holds about 35% of the Indian wine market; This makes it one of the country’s largest domestic players after Sula Vineyards, which dominates the industry and has over 60% share in certain premium and elite categories.

Last year, Sula founder Rajeev Samant said: Mint He said urban consumption had slowed following the post-pandemic wine boom, leading the company to reset stock levels, promote cooler varieties such as rosé, expand wine festivals in new cities and reduce imports.

Fratelli’s strongest markets include Delhi, West Bengal, Telangana, Andhra Pradesh and Uttar Pradesh. The company also operates in Maharashtra, Goa and Bengaluru and Sekhri said there is an opportunity to increase the stake further there.

Retail accounts for approximately 65% ​​of Fratelli’s sales; The rest comes from hotels, restaurants and catering services. While large volume sales continue ₹500– ₹1,200 price range, wines are priced higher ₹2,000 are seeing steady traction.

Mint In late January, when the deal was announced, it was reported that Indian winemakers would likely remain largely free of the lower tariffs on premium European wines, as the tax cuts would mostly be applied to price bands where domestic brands have limited presence. Wines priced below €2.5 will not receive any tariff reduction, a segment that accounts for the bulk of Indian wine volumes.

Hospitality plans

Most of the capital expenditures associated with Fratelli’s wine production have been completed, but Sekhri said future fundraising could be considered as new projects take shape.

One such project is Fratelli’s vineyard hospitality initiative on its existing Maharashtra land; here, the company is planning nearly 40 key properties designed to showcase vineyards and offer wine-pairing experiences. Sekhri said Fratelli is close to finalizing an operating partner and has received strong interest from potential collaborators, although construction has not yet begun.

The vineyards are owned by the founding family and the accommodation development will be integrated into the existing land.

Despite increasing competition from imports, Sekhri said Fratelli’s focus remains on improving efficiency in production and distribution while continuing to invest in quality.

“I think eventually all winemakers need to step up their game, become more efficient, produce better products and then find their own feet,” he said.