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Argentine wineries up in arms against 8% export duties

A campaign led by Bodegas de Argentina, the business chamber representing more than 250 Argentine wineries, is calling for the government to drop the new 8% export duties set to be levied on wineries.

Argentina faced a turbulent year in 2023 with 140% inflation and the poverty line reaching 40% of the population, which led to the population voting in the world’s first libertarian president, Javier Milei, in December. Within his first day of office, Milei introduced dramatic cuts and changes, including devaluing the Argentine peso by 50%.

Previous to the devaluation, the peso had been strictly controlled by the previous Peronista government for several years — causing a split economy with the official rate at $360 pesos to the dollar in early December and the unofficial black market ‘blue dollar’ at around $960 pesos.

While most in the wine industry welcomed the act of devaluating the peso, which makes exports more favourable, the announced increase of export duties from 0% to 8% just days later was a devastating blow.

“We are lobbying for them to remove these duties,” says Milton Kuret, Executive Director of Bodegas de Argentina. “Wine adds value to the local economy, and we don’t believe it should have duties levied. It will directly impact the profitability of exports for wineries and increase costs, adding taxes at this stage when sales are already falling makes no sense at all. It will only cause more problems.”

Bodegas de Argentina this week launched a social media campaign to raise awareness for the public to understand how the raise in duties will impact the wine industry and the economy. Within it, they claim that the export duties will put Argentina’s international competitively at risk and only lead to a further drop in export value (which already fell by 30% last year), while only bringing in an income of US$60 million for the state — which accounts for less than 0.005% of public spending.

“We really want our wines to maintain being competitive and be able to position themselves in the international markets,” stresses Kuret. “Most especially this year as we are positive we should have a good harvest.”

The news is a particularly hard pill to swallow for Argentina’s wine industry which is not only facing crippling inflation and soaring costs, but was hard hit in 2023 with one of the lowest yields on record due to adverse weather events.

Producers feel that the measures being taken in Buenos Aires are out of touch with the reality of the challenges the wine industry has faced in recent years: “It always feels that Mendoza is on the wrong side of Buenos Aires, and that we are forgotten here,” says David Kingsbury, Partner at Stella Global Wine Brokers, a leading broker in Argentina. “I think everyone is really disappointed — we had this short honeymoon period with Milei, and then bang — we got hit with this! They clearly need to get money back in the coffers and think that the wine industry is the way to do it.”

Currently the 8% export duties are being discussed in congress, and set to be voted on within the next two weeks.

Bodegas de Argentina are lobbying politicians and also trying to raise awareness and support with their social media campaign in hope to get the Milei government to backtrack on the proposals. You can follow the social media campaign on the following links:

Amanda Barnes is the drinks business regular South America correspondent and author of The South America Wine Guide.

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