Chile vs Argentina Wine Exports
Mendoza Malbec and a Bright Future For the Wines of South America
Argentina experiences explosive growth while Chile remains the overall South American market leader. Wine consumers benefit as this neighborly rivalry evolves.
Dancing the sultry tango, eating mouth-watering beef and gauchos riding on horseback are all icons of Argentina known the world over. What you may not know is that this South American country of approximately 39-million people is the fifth largest producer of wine in the world. If the trend of the last few years continues, more offerings will be arriving soon at your favorite US retailer, but that doesn't mean Argentina will be squeezing Chile off the shelf just yet.
Argentina's Gaining
The 2007 figures for Argentine wine exports reached the $496 million dollar mark, an increase of nearly 30% over 2006 according to a January 3, 2008 report by the editorial team at just-drinks.com. Exports to the USA and Brazil were up by 40% from the previous year. But is Argentina really a superstar or just the hot new diva of South American wine?
Chile's Still Leading
Price is clearly an important component in the appeal of Argentine wines, but if affordability were the only key then neighboring Chile would be the champ. In the Economist article of March 15, 2007 entitled Vino's Twin Peaks, analysis of the two countries wine exports indicate that Argentina’s growth is much more rapid than neighboring Chile, but Chile still outsells Argentina by a huge margin. What Argentina has that Chile does not can be summarized in one word – Malbec.
Magical Malbec
The Malbec grape is one of the classic Bordeaux varietals that fell out of favor in France and found a home in Argentina. In the western province of Mendoza with arid, sunny growing conditions, few natural pests and abundant irrigation water, Malbec has blossomed into a dense red wine loaded with fruit flavors that has tremendous appeal to American tastes. But it wasn’t until the 1990s that Argentina got serious about producing higher-quality wines that could compete in the world market.
Boom and Bust
While Argentina has made great strides, it also has the potential for falling back into obscurity. Like many countries in Latin America, economic boom and bust cycles have plagued the country. The most recent meltdown occurred in 2001-2002 when drastic currency devaluations sparked massive default on international debt and all but obliterated the middle class. Recovery has been equally spectacular, driven primarily by foreign investment and exports, but rapid inflation is occuring once again. Economic uncertanties threaten the wine industry’s ability to manage costs and discourages much-needed investment.
Working Together
Next door in Chile, a more stable economy and longer history of wine exporting bode well for the future. While Chile may not have the sexy personality of Argentina it continues to develop wines at the upper end of the spectrum as well as the value-priced offerings of Cabernet Sauvignon and Chardonnay that are its bread and butter. Chilean investments in Argentina’s growing wine industry have also yielded some excellent results such as Bodega Renacer’s Punto Final Malbec, a Wine Spectator Top 100 in 2006 and a Wine Enthusiast Top 100 in 2007.
Wine Lovers Win
With slowing economic conditions in the USA many consumers are feeling pinched. Wine dollars still go a long way with bottlings from both Chile and Argentina. So whether you prefer the tortoise (Chile) or the hare (Argentina) don’t bet against either. They are both winners.
Additional Sources:
- Wines of Argentina
- Wine Spectator
- Wine Enthusiast
