The cost conundrum

Updated: Mar 23 2014, 10:40am hrs
WHEN I released a book called Wine Wisdom: Buying & Drinking Wine in India, my readers had the same joke to proffer: how drinking wine was the easy part, but to buy it was tough. Either it wasnt available; or if available, it wasnt reliable; and if available and reliable, it was most definitely not affordable.

While logistics are improving, as are certain wine lists around the country (maybe its time I do a list of good wines), prices have risen at a rate that makes both our population and inflation growth rates appear stagnant. By prices, I dont mean the buying price, but the price at which wine is sold at hotels and restaurants. Sure, the euro/dollar went up, but not at the rate at which F&B establishments have marked up their prices.

The trouble is that there is always some medium to large corporate who has clients to woo or bosses to please. There is always some unsuspecting business lottery that needs to be celebrated, which means that hotels will always have a bevy of idiots ready to shell out large sums of money for a wine that is, at best, average. For commoners like us, wine is something we treat ourselves to when abroad and something we bring back from duty-free, some of us even trying to swing one past the system, as we stash in a secret third bottle.

But there seems to be a trend starting, a very minute flicker of hope, but there nevertheless. Certain outlets, it seems, are tired of seeing their bottles of wine gather dust before eventually their contents, too, turn to dust. The owners of these places are trying new approaches to price their wine lists.

First, there was The Wine Company (TWC) in Gurgaons Cyber Hub, a place I find as picturesque as a block of cement (but the food offerings are, thankfully, more imaginative). They managed to start a mini revolution with their very-low-pricing strategy. It didnt affect the bottomline, as the low margins attracted large numbers and the place was always thronging with customers. While this is terrific for wine and TWC, I dont think I will ever be able to walk into the offices in the area again with the same assurance. Sadly, of late, there has been much discussion online about how TWC has suddenly and drastically jumped prices and consumers are not very happy. But going by the waiting queues outside, I think there are enough consumers who are still pretty satisfied. However, only time will tell how it eventually turns out.

Another place is Smokeys in New Delhi. This place has gone a step ahead with pricing so radical that I encourage all five-star hoteliers to come and see it for themselves. Smokeys exacts a fixed margin of R800 on all their wines, making it a lot more affordable than any other place. It is a simple, straightforward and transparent cost plus pricing strategy and it cant get any better. Wine is flying off the shelves and most importers are only too happy to extend support to such outlets. Visibility is so valuable and yet so rare a proposition for any brand in restrictive, prohibitive India that to be seen flying off the shelves is an idea no one can look away from.

Finally, I hear Mistral is in the process of revamping thingsnew chef, new menu (new wine pricing), et al.

The lesson of the day for hoteliers Please revisit your wine pricings. They may be profitable, but are far from sensible. At a time when the market needs to be created and nurtured, this selfish short-term approach of high margins at reduced volumes is myopic and foolish.

Magandeep singh

The writer is a sommelier