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Exports

40% of the wine sold is in bulk

October 5, 2012 by María Elena Graffigna | in Exports, News

This was revealed in the last Argentina Wine Report. Far from being a market of surpluses, in the last decade, global bulk wine exports grew at rates much higher than those of bottled and sparkling wines.

The boom registered in the bulk wine market has been felt in the world. In the past decade, the percentage of this mode of exporting wine has gone from 33% to 40% of the overall volume of the wine trade, according to the last issue of Argentina Wine Report (AWR), report prepared by Área del Vino’s analysis team, exclusively for members of the Argentine Society of Wine.

“There are several reasons behind this change in the mode of wine export, but the most important is the cost reduction to boost the increasingly tight margins of producing wineries,” explained the report.

The economic crisis hit also this market. Since 2009, its growth was speeded up due to the replacement of low-priced bottled wines with bulk wine to be bottled once in destination, which is obviously a cheaper option. However, the report maintains that this is not a market of generic or low-priced wines, “there is an increasingly rise in the ratio of superior-quality wines that end up sold in higher price bands.”

One of the most dynamic countries within the bulk wine category is Spain, which nowadays markets a third of the exported volume, followed by New World’s countries. In the latter, the exchange rates, unfavorable in most of them, have been significant in this phenomenon.

The report spotlights the role these new actors of the global wine business have performed in the boom of this mode of export. Big supermarket chains, international wine companies with activities spread all over the world, and companies that are vertically integrated into some of the actors leading the change.

Argentina is not an exception to the trend. In the first half of 2012, its bulk wine exports experienced a year-on-year increase of 56% in terms of volume. This is growing in importance when we take into consideration that in the same period, bottled wine exports suffered a drop in volume, compared with the same six months of 2011.

This market’s growth clearly should not be overlooked because of the profound changes it is experiencing, and the great opportunities and threats it may pose to the export sector.

Translation: Carolina Lucesole

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