Argentina Faces Biggest Crisis in 20 Years. Domestic Wine Sales Halved

A national study reveals that viticulture in Argentina is in distress. Both local and international factors are blamed

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Where is Argentina's viticulture heading? (Photo: pincasso/stock.adobe.com)
Where is Argentina's viticulture heading? (Photo: pincasso/stock.adobe.com)

A report from the Center for Economic Studies of Bodegas de Argentina, the national wine industry association, concludes that Argentina’s wine sector is experiencing its most severe crisis in two decades. Domestic sales fell to a historic low of 801m litres from June 2023 to May 2024, marking a 50% decline compared to 2014. This drop has affected both entry-level and premium categories. Exports, including both bottled and bulk wine, also reached a record low of 207m liters.

The report highlights a dual squeeze on Argentina’s wine industry. On one side, massive inflation and diminished consumer purchasing power have led to lower domestic consumption, with younger generations shifting preferences away from wine. On the other, Argentinian wineries lack access to credit due to limitations within the national banking system, leaving them without the capital needed to invest in their operations and remain competitive in highly aggressive international markets.

The capital shortage and underinvestment are creating competitive disadvantages.

This shortage of capital and underinvestment are creating competitive disadvantages that hinder the industry’s ability to innovate and adapt to global market demands. Additionally, Argentina’s unfavorable exchange rate has negatively impacted exports, allowing countries like Chile, Spain, and France to expand their market share at Argentina’s expense.

To revitalize the sector, the report recommends winery mergers or acquisitions to attract fresh capital, scaling up wine production, and improving production efficiency. For smaller wineries, promoting wine tourism is suggested as a way to boost direct sales. SP


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