Chile debates “structural deficit”

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

Wine Trader

Vintage Capital II PLC
London, UK

International Marketing Assistant

iDealwine
Paris, France

Senior Partner Manager - Managed On-Trade

Maverick Drinks
United Kingdom

Brand Activation Executive

Pernod Ricard UK
London, UK

Logistics Administrator

Swig Wines Ltd
London

Customer Service Manager

Jascots Wine Merchants
London, UK

Transport Manager

Jascots Wine Merchants
London, UK

Head of Customer Services

Berkmann Wine Cellars
London, UK

International Logistics Manager

Wine Source
London, UK

PR Manager

Master of Malt
Tonbridge, UK

International Bulk Wine & Spirits Show (IBWSS)

California,USA
25th Jul 2018

Cape Wine 2018

Cape Town,South Africa
12th Sep 2018

The Wine & Spirits Show

London,United Kingdom
12th Oct 2018
Click to view more

The Global Malbec Masters 2018

Deadline : 1st August 2018

Champagne Masters 2018

Deadline : 1st August 2018

Click to view more

The Global Malbec Masters 2017

the drinks business is proud to announce the inaugural Global Malbec Masters 2017

The Global Sparkling Masters 2017

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

Click to view more