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Argentina keeps growing in Brazil

May 9, 2012 by Ma. Soledad Gonzalez - Mariano Zalazar | in Exports, News

In the first three months of the year, exports grew 74% on a value basis. Some restrictions upon wine imports may complicate the scenery.

For Argentine wineries the Brazilian market offers wonderful opportunities in the still wines category. In fact, many wine producing countries are starting to get established in this market; such is the case of Italy, Spain, and New Zealand.

According to Area del Vino’s statistics based on data of the International Trade Center, Argentina exported to Brazil 74% more in terms of value (FOB dollars) between January and March of this year than in the same period of 2011: USD 11 million.

Lucas Lowi, Export Manager at Terrazas de los Andes (LVMH), thinks/maintains that the prospects for Argentina are positive. “In the face of Brazil’s policy of encouraging domestic industry, some terms may be probably modified damaging imported wines. Nevertheless, due to the fact that Argentina is part of Mercosur, we believe that it will not affect our country as much as it can affect our competitors such as Chile, Spain, and Italy,” he pointed out.

On the other hand, Brazil will strengthen the production of local sparkling wines. “It is this category in which there is a big opportunity for domestic production. Even if the government decides to protect still wines, imported products will still be consumed for their value for money,” he added.

Gustavo Arroyat, Export Manager at Finca Las Moras, also gave his opinion on the Brazilian market. Nowadays, the winery is working with a new importer and holds positive expectations about the price ranges of USD 20, USD 25, USD 40, USD 55-60 and USD 100 FOB the case.

“Argentina does have more pros than cons in Brazil. If the increase of duties to the other importers were to be confirmed, we will certainly gain considerable advantage,” he highlighted.

However, Arroyat showed some concerned and underlined “the other countries that are working with the Brazilian market will not stand with their arms crossed. Chile, specially, will come out to fight for its commercial interests.”

Finally, Finca Las Moras’ manager agreed on the fact that Argentina will not have an advantage over sparkling wines. “The Brazilian industry is really strong in this market segment and, historically, Argentina has had few chances,” he concluded.

Some difficulties

A few weeks ago the Brazilian government issued a statement that announced the beginning of a research for the implementation of “safeguard” measures to wine imports in order to look after its national industry.

It is believed that since Argentina is a member of Mercosur, it would not be affected by this measure that would indeed have an effect on Chile and European countries, especially¬ those who have had aggressive sales policies in this country.

When asked on the matter, the owner of the import company, Mistral (Catena Group, Ernesto Catena, Alto Las Hormigas, Agrícola Masi), Ciro Lilla said “in theory, duties increase would not include Argentine wines. However, I believe it will not be that easy and that, at some moment, this measure will affect Argentina, too”.

Translation: Rocío Acosta

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