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Go for Russia, Not China, Wine Experts Say

With domestic consumption of wine halved in France since the 1950s, the world's number one wine producer has turned to emerging market exports as its saviour. But while the Chinese and Indians have been feted at this year's Vinexpo wine trade show, the worlds largest, there are those attending the two-yearly event who warn against both in preference to Russia.

"The margins in China are not there. It is not ready to buy at the price point where wine producers will make money," said David Skalli, a Paris-based wine consultant with family vineyards in France, California and Italy. "You have to be there, but you won't make money for the next 10 years and it is very competitive."

In India, said Skalli, the market is growing by 30 percent, but from a tiny part of the population. "Per head consumption in India is about one teaspoon," he said, but the biggest barriers are duties, about 300 percent, and logistics. Duties are to come down to 150 percent by the end of the year, but distribution and wine understanding remain difficulties.

Local sommelier Magandeep Singh, who flew to Bordeaux from New Delhi for Vinexpo, agrees that the spirit is there, but the logistics are weak. "The question I am most often asked in India is 'where can I get good wine?'," he said, but the supply is just not there. "People want wine in India and they have money - my local BMW salesroom which opened in December is sold out for the next year, some people think nothing of spending 60,000 euros on a car you see. But if you can't get the wine it's no good." The problem, agreed Singh, are the laws, the taxes, the paperwork and the differences between those in the different states.

"At the moment 80 percent of the wine in India is sold by hotels in Bombay and Delhi." All this could change next year however with the opening of Wal-Mart, Carrefour and Tesco outlets in 2008. "And that is because India's next boom is retail," he said. "Even if you
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