Chilean wine industry contends with its own success

Food & Drink Weekly, April 29, 2002

Over the last decade the emergence of New World wine producers in the international market has to some extent diluted the dominance of traditional wine producers such as France, Italy, Spain and Germany. Chile has played a lead role in this process with the national industry growing exponentially. In only ten years the country's wine exports exploded from $30 million to $600 million per year, and the number of exporters grew from 12 to 170.

However, signs are emerging that Chile could become the victim of its own success. Annual production has risen to 900 million hectolitres when the internal market and exports can only absorb 600 million. And it is becoming clear that Chile needs a strategy to promote the national industry.

US Government statistics suggest that Chile is already losing ground to its competitors. Between 1999 and 2000 Chile's exports to the US grew by 15%. But that compares to an increase of 37% by Australia, 51% by Argentina, 39% by New Zealand and 36% by South Africa.

One key problem in terms of national promotion has been the division between the two wine associations Vinas de Chile and the smaller Chilevid. In an attempt to confront the problem both associations have agreed to re-launch the promotional organization Wines of Chile, whose activities were suspended some years ago because of disagreements.