Argentina beefs up its prospects

08 February, 2008

Has Argentina reached what sociologists call "a tipping point" in the UK? Or, to put it more simply, is South America's largest wine-producing country finally set to make an impact on the British retail scene? I'm not sure they should be celebrating in the streets of Buenos Aires and Mendoza just yet - Argentina's market share is still only 1.4 per cent by value ( Nielsen figures to the end of 2007) - but there are signs that Argentina is moving closer to a breakthrough.

The figures are certainly encouraging. Not all of the wine has filtered through into the off-trade just yet, but in 2007 the total value of wine shipped from Argentina to these shores rose by 26.6 per cent in value and 15.8 per cent by volume. Rosé exports nearly doubled (to 100,000 cases) and one wine, the 2007 Tesco Finest Argentinian Reserve Shiraz, achieved sales of close to 100,000 cases on its own. The fact that the wine was discounted from Ł7.99 to Ł3.99 in the autumn (and is again on promotion at the moment) probably had quite a bit to do with this, but let's not be too mean-spirited.

I spent a couple of weeks travelling around Argentina before Christmas, visiting or tasting wines from

more than 70 wineries, and the sense of self-belief on the part of producers was extremely evident. To a certain degree, this confidence is born of Argentina's success in the

States, where it sells substantial quantities of inexpensive wine as well as its top icon wines, most of which struggle to shift cases here. The fact that Chakra, the best Pinot Noir in South America, is not exported to the UK tells you all you need to know. Names such as Cobos and Val de Flores, both outstanding wines, are conspicuously absent, too.

Grounds for optimism

Nevertheless, the Argentin ians think they have what i t takes to crack the UK market. There are certainly grounds for optimism. The Wines of Argentina generic office is doing a good job; the supermarkets appear to be getting behind the category (Tesco alone has 24 wines); and prices are attractive when you contrast them with those from Chile and, following the recent surge in the value of the euro, Europe. At a time when certain types of Australian wine are in short supply, Argentina could fill the gap from Down Under. Thanks to the Andes, it has no shortage of irrigation water. It also has an abundance of vineyards ( more than 200,000 ha) and wine styles.

If Argentina is to increase its market share to 3 per cent or more by value it needs to develop its brands further. (It is significant, is it not, that the best selling Argentin ian wine in the UK is a supermarket own-label?) There are certainly some good wines in this sector. Argento, Finca Las Moras, Otra Vida, Norton, Santa Julia and especially Finca Flichman all make wines that compare favourably with ­anything produced in Chile, the U S and Australia at the same price.

Argentina also needs to stress the diversity of its viticultural resources. Of the New World countries, only Australia can match its extensive line up of grape varieties and styles, from Chardonnay to Viognier to Torrontés, Tempranillo to Syrah to Bonarda. Malbec is the industry's main focus (shipments to the UK were up 70.2 per cent last year), but as the success of that Tesco Reserve Shiraz from San Juan makes clear, consumers are more than happy to think outside the Malbec/Mendoza paradigm if the wine is good enough and the price is appealing. One month into 2008, it's looking like Argentina's year. If so, it's about time.




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