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Argentinian fair trade wine sales on the increase

August 19, 2008 by Ma. Soledad Gonzalez | in News

The fair trade concept was traditionally perceived as a niche for coffee. Today, fair trade products comprise and important part of sales for some Argentinian companies that have started to focus on this issue. In this article, an overview of how Argentina is expanding its fair trade certifications.

The United Kingdom is one of the most important export markets for Argentinian wine. Holding the second place -behind the United Stated- in terms of importance, wine sales in Europe, and particularly in this country, it raises growing challenges. Certified “fair trade” wine sales attract more and more Argentinian producers, who benefit from sales in this kind of market and also get a “premium” allocated to improvement works in our country.

Data provided by the consulting group MRT SA  indicates that in the first six months of 2008, Argentina exported u$s 19,792,809 in bulk wine to the United Kingdom, which implies a 22.90% increase in value when compared to the same period in 2007. In terms of volume, total exports in 2007 amounted to 5,420,000 liters for bulk wine, and 17,192,333 liters for bottled wine, according to data provided by the National Grape-growing and Winemaking Institute. With regard to value, these exports added up to 41,961,460 dollars, making the UK the second market in terms of value and the fourth in terms of volume.

According to data from Mintel consulting company, the British wine market will grow by 22% in the next five years, reaching sales for 11,7 thousand million pounds by 2012, just above the growth registered in the past five years (+20%).

Regarding the volume of sales, the British consulting company indicates that wine consumption will rise by 21% in the 2007-2012 period, reaching in the last year total sales higher than 1,4 thousand million liters. Hence, this is an excellent niche for Argentinian wines and particularly for those that have been certified as “fair trade".

A report by the Argentinian Embassy in the United Kingdom pointed out that there are currently 130 wines with the fair trade seal: 16 by South African producers, 6 by Chilean producers and 3 by Argentinian producers. The most important Argentinian varietal fair trade wine sold in the United Kingdom are Torrontés and Malbec. Nowadays, there are over 200 wines with fair trade certification in the United Kingdom. Sainsbury`s supermarket chain is planning to increase their fair trade wine options by 270%, while the Tesco chain currently offers 10 fair trade, four of which are Argentinian.

According to data submitted by Fairtrade Labelling Organizations (FLO) International, the Argentinian companies and producers that have obtained fair trade certification are Bodegas y Viñedos Amadeo Marañon S.A., Cribran S.A., Davolio Nidi, Daminato, Raimundo José, Mendoza Vineyards SRL, Inal SA, Pucciarelli de Chiaramonte, Bodega Furlotti SA, Viña de la Solidaridad A.C., Trivento Bodegas y Viñedos S.A  and La Riojana Cooperativa Vitivinifruticola in La Rioja province.     

Promising actions

There are several companies working towards achieving fair trade certification, achieving additional benefits for their community.

“We started seeking fair trade certification was in 2004, which allowed us to access a market where products are worth more, consumers pay more for them because they are aware that our company takes care of the environment, treats employees properly, there is no exploitation, among other items that we have been certified for. By selling these products, we get a premium (which may be between 0.50 to 1 euro) which is used towards community improvements,” Mario Gonzalez, president of La Riojana Cooperative, commented.

Last month, using the premium obtained for selling wines to the United Kingdom, La Riojana Cooperative, the Fairtrade Foundation and the British distributing company The Cooperative inaugurated important water works that allow the increase of water availability for the inhabitants of Tilimuqui, a town in La Rioja. The project was carried out with funds from the premium of fair trade wines sold by La Riojana in Europe and the United States.

The premium may only be spent in projects seeking to improve the socio-economic situation of farmers, their families and communities, projects that are related to skills training and development, education, social infrastructure, public services, social welfare, cultural development, and environmental protection, among others. Currently, the company has 266 hectares of certified fair trade and organic vineyards and it produces 6,000,000 kilos of fair trade wine grapes.

Since 2007, Bodegas y Viñedos Trivento, in Mendoza, has been certified as a “fair trade” processing company and it buys grapes from a producer who has also achieved that certification.

“In 2007, we sold 8,000 cases in the UK and this year we are selling 30,000 cases in Nordic markets,” Andrés Izquierdo, Trivento’s general manager, remarked. This wines is sold in Europe under the “Otra Vida” brand, at 5.99 pounds, and its premium will be allocated to building and equipping a first aid center in the area of Gustavo André, in the department of Lavalle, Mendoza. It is a joint project of the company and the Fairtrade Association. “We are waiting to see what happens with the 2009 harvest; we want to evaluate if this is a trend in the wine world, as it happened with coffee and cocoa beans, we want to know whether it is a social awareness fashion, or a market niche,” Izquierdo added.

World trade trends

According to the Comercio Justo organization “in 2007 products endorsed with the Fairtrade seal accounting for 2,300 million euros were consumed at the world level, meaning that the fair trade market grew by 47% in relation to 2006. In Spain, where the fair trade certification is still quite young, there are more and more people who want to be sure that they are consuming socially responsible products, with regard to Southern producers, that there has been no child labor involved in the production and that the environment has been respected. Hence, they chose certified fair trade products.”

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