chile: overview TOUGHING it out


With a multitude of problems currently facing the Chilean wine trade, the real earthquake is now, according to one producer, but it is proving itself a hardy survivor, writes Gabriel Savage


A YEAR ago, Chile was still feeling the aftershocks from its 2010 earthquake. For many producers, the disaster and its accompanying price rises created a resolve to send out a unified message of quality over quantity. One year later and problems overshadowed by the earthquake – a strengthening peso, weakened dollar and increased costs, not to mention pressures in export markets such as the recurring UK duty hikes and ongoing economic woes in Europe and the US – have piled on yet more pressure. Add to this the significantly smaller than


expected 2011 harvest, with its accompanying impact on bulk wine prices that have doubled in the last year, and it becomes clear that, particularly at the entry level, something has to give. “The real earthquake is now,” remarks Patricio Middleton, managing director of MontGras. Having seen the storm brewing, five years ago Middleton shifted the company’s UK strategy from selling at £6 with a significant supermarket presence to its current £8.99 entry point and, in line with Middleton’s requirement of “long-term relationships


and loyalty”, a multiple retailer partnership limited to Waitrose. For those producers who had continued to absorb costs, the dam has finally broken and across the board we can expect long overdue price increases from Chile. “Three for £10 is impossible to get into now,” confirms Felipe Bascuñan, European director for Via Wines. “We need to build up one step higher.” In some corners, the current pressures have forced companies to explore efficiency savings. Putting an upbeat spin on the situation, Cono Sur’s export


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