Chile debates “structural deficit”

20th July, 2012 by Gabriel Stone

As latest export figures show a tough start to the year for Chile, many producers still believe an extensive vineyard planting programme is vital if the country is to meet future demand for its wines.

According to the latest export figures from Wines of Chile, total volume shipments of bottled wine fell by 1.8% (12 months to May 2011 vs 12 months to May 2012), although total value shipments rose by 3.1% during this period.

Much of this was driven by declines in Chile’s two largest export markets, with the US seeing a 12.27% volume decrease and UK volumes shrinking by 8.65%.

However, there was promising growth from other major export markets, with volumes to Brazil growing by 10.86%, Japan by 24.35% and China by 37.06%.

While bottle sales struggled overall, Chile’s total bulk shipments surged by 45.29%. This was driven by the US following its own small harvest and China, which Cristian Rodriguez, commercial director of Emiliana described as “buying bulk like crazy; there was a 70% increase last year.”

Looking at the overall picture, Luis Felipe Edwards, managing director of Viñas Luis Felipe Edwards, warned: “I still believe Chile has a structural deficit,” insisting: “Planting is the name of the game for the next five years.”

In line with this argument, Viñas Luis Felipe Edwards is continuing its large scale programme of land acquisition. On top of the 400 hectares purchased two years ago, Edwards has immediate plans to buy 800ha of land, half of which will be planted this year and half in 2013.

Ernesto Müller, managing director of Grupos Vinos del Pacifico, also outlined a similar commitment to vineyard expansion, reporting: “In the last five years we have planted 1,800ha, all premium vineyards.”

At Concha y Toro, Chile’s largest producer, deputy communications manager Bianca Bustamante confirmed: “We are adding 300-500ha every year of new plantings and we are investing in new valleys like Leyda, Cauquenes and Limari.” This year alone the company is aiming to add 500ha, split between Limari, Litueche (close to Rapel) and Cauqenes.

However, not all producers share this strategic viewpoint. “I think there’s way too much being planted,” warned Hugo Desenzani, sales director at Leyda-based Viña Garces Silva, which owns the Amayna brand.

To support his argument he observed: “The best tool to see if we have a deficit is the look at the average price per kilo for grapes. The trend now is for a decrease, but each year more grapes are planted. We had to throw out grapes this year because we couldn’t sell them.”

Instead, Desenzani continued, “We need to be smarter with our resources.” Particularly in the light of a widespread shift among Chile’s producers towards more premium positioning, he suggested: “If you are focusing on being a premium producer then plant less, sell less and come up with a different price tag.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Job vacancies

Senior National Account Manager

Bibendum PLB
London, UK

ON-TRADE Sales Executive

Roberson Wine
London, UK

OFF-TRADE Sales Executive

Roberson Wine
London, UK

Judging Week Runners

Decanter World Wine Awards
ExCel Centre, London E16, UK

Sales Administrator

Les Caves de Pyrène
Guildford, UK

Retail Commercial Executive

Laithwaite's Wine
Theale, Berkshire

Wine Buyer

Conviviality Plc
Crewe, UK

Sales Account Manager - On-Trade

Berkmann Wine Cellars
Liverpool

Sales Account Manager - On-Trade

Berkmann Wine Cellars
M3/M4 corridor

Media Sales Manager - Hong Kong

The Drinks Business Hong Kong
Hong Kong

Regional Account Manager

New Generation McKinley
London, UK

Experienced Sales Account Manager – On Trade

Cantina Goccia
London and the south, UK

National Sales Manager – Premium Drinks

Core Recruitment
London based with national travel

The Global Merlot Masters 2017

Deadline : 24th February 2017

The Prosecco Masters 2017

Deadline : 10th March 2017

db Awards 2017

Deadline : 28th April 2017

The Global Organic Masters 2017

Deadline : 3rd March 2017

Click to view more

The Global Sparkling Masters

the drinks business is thrilled to announce the launch of The Global Sparkling Masters

The Global Rosé Masters 2016

the drinks business is proud to announce the launch of the Global Rosé Masters 2016.

The Prosecco Masters 2016

Now in its third year, the competition will reflect the growth in popularity of this fresh and exciting sparkling wine from the picturesque regions of Veneto and Friuli.

The Global Pinot Noir Masters 2016

After the success of last year’s competition that judged over 250 wines from no less than 16 countries, the drinks business is proud to announce the third year of the Global Pinot Noir Masters

Click to view more