Argentina: A giant awakening

Wines & Vines, Nov, 2001 by James Lapsley

In 1985, Phil Hiaring visited Argentina for Wines & Vines and referred to it as a "Sleeping Giant." While as the fifth largest wine producer in the world, it still is a giant, it is no longer sleeping, and California producers should start to pay attention. There is an old joke that an "expert" is someone with a briefcase who is more than 50 miles away from home. For almost two weeks, from the end of February through the first week of March, I was several thousand miles away from home, visiting Argentina during the beginning of harvest with my traveling companion, Dr. Jerry Last of the UC Davis Medical School.

Although I had my briefcase with me, I am far from an expert on Argentina and can barely order a glass of vino tinto in Spanish, so my comments should be taken as those of an interested tourist, not those of an expert. In retrospect, three main points stand out.

First, despite being distant from any maritime weather influence, Argentina can produce intensely flavorful grapes that can compete with grapes grown on the California coast. Secondly, land is available and inexpensive (although perhaps limited to some degree by availability of water), which should allow a competitive advantage in the world market as Argentina begins to export. Thirdly, the major problems inhibiting improved quality are psychological and financial. Argentina has been inward-looking for almost a century, and to compete in a world market it must adopt world quality standards rather than its own. Having adopted such standards, its producers will need to find capital, perhaps from joint ventures, to modernize winemaking processes.

A Brief History

An understanding of Argentina's past political and viticultural history helps makes sense of present circumstances.

Like California, Argentina has experienced viticultural busts and booms, but generally within the context of a closed economy and a society that consumed 70 to 80 liters of wine per person. Although all of Argentina's grapes are vinifera, the earliest varieties, introduced over 300 years ago, were "Criollas," which were probably grown from seed in the New World. (A creole is, after all, a person of European ancestry born in the New World).

Like our Mission grape, they produced well, but made low-color, unflavorful wine. Even today, almost a quarter of Argentina's 216,000 hectares are planted to Criollas or "native" grapes.

In the mid 1850s, European cultivars were introduced into Argentina, resulting in the same confusion of names and varieties that we experienced in California. Merlot, Cabernet Sauvignon and Petite Verdot were all introduced, along with the variety most associated with Argentina: Malbec.

Increased European immigration in the late 19th and early 20th centuries, notably from Spain and Italy, helped swell the demand and profitability of table wine production and introduced Italian varieties.

Following World War II, Peron's nationalist government created a closed national economy and encouraged expansion of plantings through agrarian reform. Inexpensive water for irrigation, which had been controlled by large landowners, was made available to small landowners, leading to a peak of 886,000 acres in 1977.

This planting, along with a consumer shift toward white wines in the 1980s (which has since shifted back to reds), led to a dramatic oversupply in grapes, resulting in the emergence of a market in bulk concentrate as a sugar substitute and, ultimately, during the 10-year period between 1982 and 1992, a 36% reduction in planted acreage.

Following the end of military dictatorship and the election of Argentina's second democratically-elected president, Carlos Menem in 1990, Argentina began to look outward. The decision to move to "convertibility" in 1991, which tied the Argentine peso to the dollar, effectively ended the inflation that had plagued the Argentine economy for the previous decade. Economic stability made Argentina much more attractive for international investment, and during the 1990s, several European and U.S. firms either started wineries in Argentina or structured joint ventures, sometimes leading to the development of new vineyards in cooler regions such as Tupangato, southwest of Mendoza.

These investments were focused on improving wine and grape quality with an eye on export markets, and the new wines have been well received in the United Kingdom and Germany.

Coincidentally, the internal market has moved away from wine to some degree. Per capita consumption has dropped from about 70 to 40 liters, with the bulk of the decline occurring in lower-quality wines. The result has been confusion in the Argentine wine community: a sense of optimism among the quality producers, who foresee a future in fine wine production, and a sense of dismay for the old-line producers who are experiencing a shrinking market for indifferently made wines from poor varieties.

Mendoza

Possessing almost one third of Argentina's population, Buenos Aires dominates the country, and most commerce is directed through the capital. One winemaker told us, "In Argentina we say that God is everywhere, but that his desk is in Buenos Aires!" While that may be true, in Argentina, God's vineyard is in Mendoza.