A look at Argentina’s wine sector

Few people realise just how much shared history Argentina and Australia have. As Europe and the United Kingdom colonised the vast plains and discovered the mineral wealth of both countries, a commodity boom ensued in the late 19^th to early 20^th centuries that led both Australia and Argentina to become among the richest countries in the world. However, twists of fate have pushed each country on different courses.

Shared history of winemaking

Both Argentina and Australia have a long history of winemaking.

Argentinean European immigration was heavily led by southern Europeans, whereas Australia’s was more British-focused and this was reflected in differing alcohol beverage preferences that persisted well after the first generation of migrants.

In the early days of colonisation, Australians preferred beer while the Argentineans preferred wine. Today, Argentina is the world’s fourth largest wine producer.

Argentinian wine in the global market

There are two more recent factors that have led Argentina into becoming a large force in global wine markets.

A political revolution begun in December 2015, when Mauricio Macri was elected on a pro-open business platform – a reversal following decades of anti-trade policies.

The second force is two short consecutive vintages. The 2016 vintage produced 880 million litres of wine, down from 1.34 billion litres in 2015 and 1.5 billion litres in 2014. Furthermore, estimates for 2017 are for a slight improvement on 2016, but still well down on previous years.

Exports are a priority for Argentinian wine

Argentinean wineries have decided to service their international wine markets as a priority compared to their domestic market.

In the year to April 2017, Argentina’s exports have declined by 18 million litres to 240 million litres, while imports have surged from virtually zero to 60 million litres.

There is a good reason for Argentina’s decision to prioritise export markets, as the average price of imported wine is US$0.75 per litre compared to Argentine exports at US$3.32 per litre.

Australian wine in Argentina

Due to the anti-trade policies of previous governments, Argentina has never been a significant market for Australian wine.

In the five years to 2015–16, no Australian wine was shipped to Argentina. However, in 2016–17, a total of 144,000 litres of Australian wine was exported – all of which was bulk dry red wine. Although this trade may not signify consumer demand for Australian wines, we may be witnessing the beginning of the opening up of a new market for Australian wines.

Key wine market statistics