The political and economic harvest has begun in Mendoza, with great concern for the prolonged decline of the wine businessalbeit in front of an audience made up of majority politicians and entrepreneurs linked to the government national.
The breakfast at the winery (Coviar) began, among other things, after 11.30 pm for waiting for Vice President Victoria Villarruel who missed the first flight in Mendoza, after attending Congress on Friday evening.
Javier Milei himself underlined in his opening speech that officials will not travel on private flights, as in the past. The Minister of the Interior traveled on the first scheduled flight, Guillermo Francos; the Minister of Defense, Mendoza Luis Petri; the Undersecretary for Tourism and Sport, Daniel Scioli, and the Undersecretary for Industry, Juan Pazo.
The vice president traveled on another commercial flight and arrived around noon. The radical governor Alfredo Cornejo, who had already agreed to participate in the May Pact banquet, received it and waited for the presence of the vice president to begin the meeting of producers and winemakers.
Coviar is a mixed organization (public and private) that manages actions to achieve the objectives of the Argentina 2030 Strategic Wine Plan (PEVI), to promote its development. They integrate it 13 business rooms and productive throughout the national territory, the INTA and the INV which represent the National Government and the governments of the wine-growing provinces.
In his speech, the president of Coviar, Mario González, celebrated that the meeting can take place in an atmosphere of dialogue between the public and private sectors. “Faced with every context, favorable or adverse, national or international, Argentine viticulture looks to the future with optimism because we have a plan, a common horizon, built with consensus and in a participatory way, which we all want to achieve,” he highlighted.
He highlighted the urgency to improve the economy: “We need predictability, clear rules and achieve competitiveness“said the entrepreneur.
And he underlined: “Argentine viticulture has enormous growth possibilities in the global wine market. To grow abroad, we must increase promotion and presence in the world, as well as achieve favorable trade agreements that increase our competitiveness.”
Producers and winemakers will benefit from the visit of national officials that Milei management states that no withholding taxes will be applied on exports. The initial draft of the Omnibus Law applied 8% withholdings to wine and commissions, which were removed and brought back to 0%, as in the case of yerba mate, peanuts and other regional products.
Argentine viticulture as a regional economy has a total of 204,848 hectares planted with vines by 2023, distributed across 23,046 vineyards and in the hands of 17,000 producers. And as a regional economy it generates 113,070 direct jobs, according to data from the Argentine Wine Observatory.
Argentina is a central player in global viticulture. “As a country, we are the 7th largest wine producer in the world; the tenth largest consumer, the eleventh largest exporter in the world in terms of volume and the second largest exporter of concentrated grape juice in the world. “Wine is part of the culture and table of Argentines and contributes to building the national identity and brand in the world,” said the president of Coviar.
Decline in sales
During the week, as a prelude to Vendimia, the economist Javier Merino presented the report on the wine situation, which he produces every year, on the initiative of the Banco Supervielle.
The 2024 edition was number 10 and allowed us to take stock of a decade. “In 10 years the turnover of the wine sector has fallen by 42%, almost half of what was sold in 2013. “Investment, jobs and participation in the global market have been lost.”according to the report data.
Merino considered it A period of mergers and acquisitions is approaching. “Possible joint trade agreements between producers and wineries to survive, because wineries will not invest in their own vineyards, but they have to guarantee quality grapes,” he said.
The consultant said this can improve the industry’s prospects if inflation drops and sales on the domestic market are reactivated. But, he underlined, “to grow we need new investments and external financing”.
The success factors in recent years, according to the comparative study of 50 wineries, have been having bet on higher price segments (the lowest priced wines cost half what they did 20 years ago) and have focused on the US market.
Another success for growth was the professionalisation of management (many wineries were family-run SMEs) and innovation in product formats, processes and marketing, such as placing their importers abroad.
Regarding exports, the report highlights the competitive disadvantage compared to producing countries. “They pay double the tariffs compared to Chile. We need free trade agreements like our neighbors,” Merino said.
Complaints and praise
To conclude the business meetings, the Harvest Festival will be held this Saturday at noon, organized by Bodegas de Argentina, an entity that brings together more than 250 national and international partners.
The winery meeting does not take place in a winery in production, but in the renovated Arizu space that belonged to an old winery built in 1888, on San Martin street at 1500 Godoy Cruz.
The company was owned by the Arizu family for 90 years and in 1978 it passed into the hands of the Greco Group. Subsequently, in 1980, it was taken over by the National Government and continued to operate as Bodegas y Viñedos Arizu until 1991, the year in which it finally closed its doors.
The president of Bodegas de Argentina, Walter Bressia, will be responsible for the intervention, which will focus on maintaining the elimination of withholding taxes on wine exports, on the request for a reduction in inflation that affects the subsistence of the sector and on the need to stabilize the macroeconomy to recover exports.
Around 50 labels from 20 wineries will be served at the event, which will be attended by around 650 people and national authorities.
Financing
During the Mendoza Investors Forum, organized by the Mendocino Business Council and the provincial government, regarding Vendimia, the situation of the wine industry was discussed, debates and networking forums on tourism, franchising, energy, mining and technology companies.
Participants listened to the announcement of the Secretary of Industry and Productive Development of the Nation, Juan Alberto Pazo credit lines for 72 billion dollars for the production sector.
The official announced it the financing will last five years projects that seek to improve water efficiency, such as waterproofing canals and canals and purchasing irrigation equipment. Another line will focus on the purchase of tractors and equipment in general, al modernization of systems and the installation of anti-hail net.
Pazo said the credit facility will be available in the coming weeks, in public and private banks, with a Badlar rate +4% and a maximum limit of 115% for the first two years.
Of the 72 billion dollars, he explained, approximately 40 billion will be allocated to working capital and the remaining 30 billion will be allocated to investments in infrastructure.
Source: Clarin
