SLIPPING SIPS

Similarly,it has been reported that 50 per cent of employees at Indage UK have been laid off this month. Ranjit Chougule,Managing Director,and Shamrao Chougule,Chairman,both did not comment and,symbolically,the Corporate Communications representative has left the company.

Subhash Arora,President of the Indian Wine Academy in New Delhi,analyzes where Indage went wrong: “Firstly,they stretched themselves too thin with aggressive acquisitions overseas,some of which were overpriced; they were being too ambitious and too leveraged. Secondly,their domestic marketing policies were chaotic. If the recession had not hit them,they would have remained on at the top — but only for a couple of years.”

Sula Wines,the vibrant winery started in 1999,is now generally accepted in the domestic wine industry as having taken over Chateau Indage’s position as market leader,even though there is no recognised independent body that accurately tracks wine sales nationally.

Rajeev Samant,CEO of Sula Vineyards,doesn’t see this as a hollow victory though. “First and foremost,number one is number one,especially when your rival has unsustainable business practices,” he says. “Secondly,we were continuously gaining market share despite a shrinking market,a testament to our quality and consistency. Yes,Indage has collapsed but it doesn’t make a difference to me.”

It was probably a matter of time before Sula toppled Indage for the top spot and it would be unfair to take this triumph away from Samant. “Rajeev is a shrewd businessman and a great marketer who does not believe all his labels have to be the best in the market but they must be best loved and consumed,” feels Arora. “The way Sula has been going,it would have happened after three-five years.”

The main unsustainable business practice that Samant mentioned was Indage’s policy of offering distributors one free bottle for every bottle purchased. “To some extent it expanded the market,but I believe that no business is better than bad business. Sula gives least discounts,but we have the brand value and quality that allows us to do that,” says Samant.

Despite the Chougule family pledging a majority of their stake in the firm,Arora states that the company might face bankruptcy. The brand,however,is likely to survive; “for a company that can manage well,the brands and the winery assets and location could be a good buy”. Indage currently owns the Ivy,Riviera,Tiger Hill and Chantilli brands,amongst others.

It would be detrimental for the fledgling Indian wine industry to lose their biggest player—despite the fault being their own. Even though newer labels—Kingfisher’s Four Seasons,Zampa and Seagram’s Nine Hills—have entered the market,Indian wines could do with some top-heavy competition to spur the industry on.