Just like me after a couple of glasses of Mendoza’s finest, Argentina’s wine industry hasn’t been particularly steady over the last few years. After a remarkably promising decade, which saw the sector’s exports multiply fourteen-fold, approaching US $1 billion in 2012 and threatening to outdo Chile in huge markets like Brazil and the US, the industry has taken a rather large spill. But fear not, dear winos, there may still be some wine at the bottom of the barrel.
In 2013, exports fell from US $918 million to US $866 million; in 2014, estimates came in at US $823 million. As for more recent times, according to Paris’s International Organization of Wine and Vine, wine production in Argentina fell by a massive 29 percent last year.
Chile, meanwhile, has sped ahead. On the other side of the Andes, South America’s wine giant closed 2016 with US exports worth over US $1.8 billion, more than double that of Argentina. And it gets worse: a single Chilean winery, Concha y Toro, is actually flogging more wine than the whole country of Argentina sells abroad.
Argentina’s recent tumble has been largely attributed to climate change – it’s safe to say that flooding has not been kind to the country and the 2016 harvest was lower than it had been in 50 years. However, Aníbal Marín, commercial manager of Mendoza’s Viña Las Perdices winery, has also pointed a finger at a lack of international deals: “Chile has a great advantage over us because it’s been working with multilateral treaties and regional agreements since 1980, which has given a great amount of dynamism to all of its foreign trade.”
“From 2007, we had to give up many international markets and it’s never easy to get back into the supermarkets aisles and restaurant menus that you were once a part of,” she added.
But it’s not all gone sour quite yet. Argentina may not be clinking quite as many glasses with the US or the UK anymore, but exports to China are growing quickly. In 2016, China replaced the US as Chile’s main buyer and, although it’s still early days, this looks like good news for Argentina too.
Last year, China only placed seventh in the ranking of Argentina’s wine export destinations, with a share of less than 3 percent in total exports. However, we can drink to the fact that it is one of the few markets in which the demand for Argentine products is on the rise, with an increase in dollars of 16.9 percent in 2015 and 11.1 percent in 2016.
“Today, China is the most dynamic market for Argentine wine, although to keep growing, the duty tax issue is a key issue. Chilean products enter China without tariffs, which together with lower transport and port costs make a very big difference. The cost of selling Argentine wine in China is 65 cents per bottle against the 10 cents it costs a Chilean winery,” explained Daniel Rada, director of the Argentine Wine Observatory.