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LOCAL AND INTERNATIONAL FACTORS: Exports fell by 10.4 percent but those of bottled wine rose. Canada and the United States are the best customers.
In 2009, viticultural industry exports totalled almost US$ 771 million, 10.4 percent under 2008 records.
Sales of bottled wine were not affected by the downswing; they surpassed US$ 553 million, a 10.3 percent increase over total 2008 sales.
In fact, the highest money fall impacted on the must: from US$ 224.2 million exported in 2008 to almost US$ 136 million last year (-39.5%); whereas the sales of bulk wine suffered the worst fall: 57.6 percent (from US$ 85.6 million in 2008 to US$ 36.3 million in 2009).
The remaining categories, boxed wine, sparkling wine and other containers (basically bag in box), have become somehow less important even though their contribution to exports is lower.
The result of the year, which resulted in several damages to the industry, had its reasons. “There are foreign and domestic causes that explain why exports in the sector, that were annually growing steadily by 2 digits, backed away to such an extent”, says Exequiel Barros, partner associate of the specialized consultant Caucasia Wine Thinking.
And he adds: “The international financial crisis meant that expenses had to be rationalized mainly over goods which are not basic ones. Some products were privileged and wine is clearly not something essential”.
Among domestic causes, Barros points out that “2009 harvest had many problems, with a decrease of about 20 percent. This is a lot and this is why it was mainly felt over must and bulk wine. Moreover, this meant a strong price increase and a reduction in wine stocks.”
Taking this situation into account, several producers decided to apply this stock wine, that many times is sold by bulk, to more expensive categories and, obviously, bottled. The product shortage compelled some big wineries with presence in the massive low-price consumption to import Chilean wine to supply internal market. It amounted to five million litres, a small figure for local production but it points out the magnitude of the loss in 2009 harvest.
Within exports dynamics, the most significant issue was clearly the strong sales growth to two markets: United States and Canada, which increased their sales regarding 2008 by 29.5 percent and 37.1 percent, respectively. “The strong demand of these markets was very good for the industry. For instance, we have to take into account that the United States reduced their total wine exports but increased the sales of Argentine products. There was a substitution of European wines that benefited us a lot”, Barros concluded.
Beyond points of view, there are some details to be known:
Export prices which increased more in percentage were those of the must (8.3 percent), bulk wine (25.6 percent) and boxed wine (10.4 percent), which seems to confirm the lack of raw material. Bottled wine barely increased by 2.1 percent.
Exported volumes are the other side of these values. Bottled wine went up by 8.1 percent whereas bulk wine fell by 66.3 percent; must fell by 44.1 percent and boxed wine and wine in “other containers” lost 11.7 percent.
Regarding leader wineries in exports, the world ranking is lead by the multinational Grupo Peñaflor, which tops the exports of bottled wine, bulk wine and wine in other containers. In the sparkling wines category, the exporter leader is Chandon, of the multinational Moët Hennessy, and finally the local RPB group (of the Biaggio family) as the major importer of fractioned boxed wine.
The concentration of exports in the first five wineries is remarkable. For the total amount of wines they manage 35.6 percent of total sales abroad. In the case of bottled wine, these five wineries have the 35.9 percent. They have 56.9 percent of bulk wine. For boxed wine, they export 97.9 percent out of the total. Sparkling wines represent 60.1 percent. As regards other types of containers, they represent the 94.3 percent.
In bottled wine, the price segment which grew the most (20.4 percent) is the one corresponding to cases worth between 39 and 60 dollars. The mainly exported wine was that which was worth 15-26 dollars per case.
Concerning vines, Malbec, the king of bottles, grew 20 percent as regards 2008 and took 33.6 percent of total exports. The other national vine, Torrontés, increased by 31.1 percent but with a very small sales volume.
A surprise: Syrah-Malbec increased by 56.4 percent and captured 4.6 percent of total sales abroad.
(Foreign trade – Alcoholic beverages)
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