Chilean winemakers in fear of tax hike

A proposed tax hike could force some Chilean winemakers and grape growers out of business, it has been reported.

ChileWine is currently taxed at 15% per litre within the wholesale market, however, if proposals are passed by the country’s government, in September this would rise to 18%, plus 0.5% per degree of alcohol, representing a 60% rise for wines with a 12% abv.

Winemakers fear the tax will hit smaller producers who rely on the local market hardest, potentially forcing many out of business, by driving down wine sales and driving up beer sales, according to a report by Wine Spectator. 

Four decades ago, 86% of alcohol consumed in Chile was wine, whereas now the figure stands at 34% with beer and spirits edging in on the domestic market.

Without a strong domestic market, the industry will be weakened, with Aurelio Montes of Viña Montes, and vice president of Wines of Chile, declaring that the tax hike would be “devastating” for small producers who sell their grapes for wine for local consumption.

He said: “Wine is not a simple economic activity. If a small farmer has to pull up his vines because the proposed tax forces him out of the marketplace, it is not the same as a neighbourhood shop closing and re-opening as a shoe store.”

Those in favour of the tax say it will raise vital revenue for educational projects while preventing excessive consumption, however Montes said the wine industry has long had an “impressive agenda dedicated to education, training and certifying workers,” and that hurting their industry “made no sense.”

To date 45,000 people have taken part in training initiatives to prepare for a career in viticulture, Wines of Chile said, with an increase to tax threatening the funding if such programmes.

Members of the industry are currently in talks with the Chilean government in an attempt to prevent the tax hike.

Blanca Bustamante, corporate communications manager for Viña Concha y Toro, added: “Our views are absolutely in line with Wines of Chile. We are working together with them to present our opinion and voice.”

Leave a Reply

Your email address will not be published.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

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Sales Scotland

Liberty Wines
Scotland, UK

Supply Chain Supervisor

Speciality Drinks
UK, UK

Sales Manager

Stilnovisti
London, UK

Regional Key Account Manager - On Trade

Lanson International UK
South of England, UK

Private Account Manager

Jeroboams Wine Merchants
London N1, UK

Sales Role

JF Tobias
London, UK

Events Assistant

Decanter
London, UK

Head of Marketing

Decanter
London, UK

Market Manager - Asia

Wines of South Africa
China,

Administrative Assistant – Private Clients

Howard Ripley Ltd
Barnes, London, UK

Prosecco Springs

London,United Kingdom
26th Apr 2018

Spirits & More

Rome,Italy
19th May 2018

db Awards 2018

London,UK
23rd May 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