World Malbec consumption

Source: WineSur

“World Malbec consumption amounts barely 3% and the limit is still far away”

In an interview with Vinos & Bodegas, Mario Giordano, manager of Wines of Argentina, talked about the present and future of the industry within a complex context

Last year, with an increasing loss of exchange competitiveness and wine-producing countries having aggressive price policies, the Argentine wine had no great results in the world.

Bottled and bulk wine exports ended 2013 with a drop of almost 2% in terms of volume. However, in value, numbers showed no changes in comparison with the previous period, since turnover experienced an increase as a result of a 2.4% boost in the average export price.

“It is a situation that has been noticed since 2011, with a gradual loss of competitiveness within medium and medium-low price segments. Today, Argentina has lost opportunities,” maintained Mario Giordano, manager of Wines of Argentina, entity in charge of promoting Argentina wine in international markets.

Nonetheless, he highlighted that “it is really positive that our worldwide positioning was never based on the lowest price ranges, enabling us to maintain the same level of turnover.”

Asked about whether the highest devaluation rate, with which Central Bank has recently been moving, would lead to an improvement of competitiveness in real terms, Giordano explained that “this is not just a question of speed of devaluation. It is an issue that helps in the short term to improve profitability, but imbalances in relative prices are crucial to regain competitiveness”

“We believe there are many aspects of Argentina’s macroeconomics to change and I think our comments would not bring anything significant. Our mission is still to keep at the top the image of the Argentine wine in the world, the basis of our training and this is our second decade performing actions,” said the executive.

When analyzing the performance in Argentina’s main export destinations, Giordano pointed out: “United States, United Kingdom, and Mexico are the most dynamic markets. In the rest, there are some drops due to the fact that some wineries have lost part of their business that was very important for Argentina’s share”.

In relation to the present and future of Malbec, varietal accounting for the half of exports of local wineries, Giordano stressed: “the world Malbec consumption amounts barely 3% and the limit is still far away.”

Moreover, he made great reference to the fact that “there are still many countries wanting to produce this variety, what is very positive. Argentina will remain leading as the country with the highest production of Malbec and working hard to keep making the best Malbec in the world.”

In addition, the executive made projections of export for 2014 and said: “we will have to wait for structural changes in the composition of costs to grow in ranges of greater stock turnover, but Argentina will not experience it this year. However, we hope to keep all markets active, trying not to lose our appeal.”

Concerning the actions to be performed by Wine of Argentina to enhance the image of Argentine wine in the world, Giordano maintained: “we will go for creativity, aiming at differentiation, taking in mind the two aspects of our strategy: diversity and the constant innovation.”