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New World’s countries look to counteract negative effects of bulk

September 17, 2012 by Redacción | in Exports, News

Trouble is brewing between South Africa and the United Kingdom because of the highest imports of bulk wine of the latter country. Chile is concerned about the increase of bulk wine exports to the United States. It is forecasted that Spain will not be in position to sell bulk at low prices to the world.

South African government is about to take measures to counteract the rise in UK imports of wine in bulk, according to La Journèe Vinicole newspaper. Between 2006 and 2011 – 2012, South Africa raised its bulk exports from 35% to 52%, leading to job losses and putting at risk the future of bottling companies.

“In a cabinet meeting, the South African government announced a series of measures to counteract the spiral effects of bulk exports. Moreover, it will launch programs to reduce environmental costs in the production: better packaging options and an awareness raising program for consumers to understand better the integral indicators of environmental monitoring”. This is because United Kingdom has underlined that it prefers to buy bulk due to the environmental “sustainability”.

Chile, worried about bulk exports to the United States

In the first half of 2012, Chilean bulk wine exports beat a record, amounting to USD 840.2 million, with a 10.2% boost compared to the same period of 2011. United States registered an over 400% increase in the volume of bulk.

René Araneda, president of Wines of Chile, told that “the problem (bulk boom) is that while the industry invests USD 100 million per year, with focus on the development of Premium wines, it is said in the market that the profitability comes from bulk.”

The growth of exports to the United States -according to the article published by El Mercurio newspaper- is the result of a “draw back”, a trade measure applied by US authorities. This measure enables producers to recover partially up to 99% of duties they had paid for imported supplies, which had been used later in the making of a product to be sold in the country or exported. Besides, all payments for port services are refunded.

“This measure is anticompetitive,” told René Araneda to the newspaper, “because production costs in Chile are rising, and national consumers are in front of a wine that is 20% more expensive, due to a greater shortage.

Then the professional added that this growth of bulk exports to the United States is also the product of a plunge seen in the bottling wine industry,  which garnered a 15% fall by volume and 12% by value in the last year.



Translation: Carolina Lucesole

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