Australia's Cranswick Premium Wines today announced a joint venture with Chateau Indage, the Mumbai-based company which commands 70% of the fledgling but potentially massive Indian wine market.

In a deal finalised after only two weeks' negotiations, Cranswick is to be the sole supplier of Australian wine to Indage and will, in turn, be Chateau Indage's sole distributor in Australia.

The deal comes after other Australian companies, including Southcorp, had investigated but not proceeded with joint ventures with Chateau Indage, a subsidiary of the Indage Group, one of Mumbai's major public companies.

Indage, however, has one other international venture - a tripartite agreement with California's Wente Vineyards, Bordeaux's Groupe Taillan and Moselle's Peter Mertes.

The trio ship bulk wine to Indage's two wineries at Narayangaon, 200km south-east of Mumbai for bottling and marketing under their own labels using Chateau Indage's extensive distribution network.
Cranswick and Indage are currently finalising a joint label for which Cranswick, Australia's sixth largest exporter, will initially ship 50,000 litres of Shiraz and Semillon-Chardonnay to Indage before the end of the year.

"We'll see how it goes," Cranswick's MD, Graham Cranswick-Smith said today. "In the long term there are enormous opportunities but in the short term it will be slow as we build brand recognition."

India has 900 million people with 250 million "middle class" people and 17 million millionaires, annual per capita wine consumption being only a few millilitres.

He said he was "quite happy we've got the right partner" because Indage was one of only a handful of companies to have licences to distribute in all Indian states, except the four 'dry' states.

For Indage, the deal provides further supplies in a market in which only about 50% of demand is currently met.

With a crush of about 1,000 tones from 600 acres of vineyards in 800m high plateau country at Narayangaon, Indage exports 40% of its production mainly to the UK where it supplies 1,000 Indian restaurants.

Indage is a subsidiary of the diversified, construction-based Indage Group, which established the wine subsidiary in 1984 following a five-year agreement with Piper Hiedseck subsidiary Champagne Technologie, to establish vineyards and plant.

Southcorp considered a deal with Indage about 18 months ago but is understood not to have decided not to proceed because it was not willing to allow any of its brands to be bottled outside its control.

Cranswick-Smith said today that Chateau Indage has recently installed a new bottling line and that a Cranswick senior manager would be sent to India to supervise bottling.