Argentine Wine Category Slumping

If you can’t find that delicious under-$10 Malbec from Argentina that you’ve grown to love, don’t blame the retailer, or the importer, or the winery.  Blame Argentina’s economy.  Rampant inflation has sent labor costs soaring making it unprofitable to produce less expensive wines.

According to The Wall Street Journal, wine is one of the hardest hit agricultural products because grape picking is labor intensive.  Costs have risen 100% in the last four years

Argentina was the world’s fifth largest wine producer in 2011 based on the latest statistics from the International Organization of Vine and Wine.  Since then, exports have slumped by 5% last year and by 5.5% in the first five months of 2014.  The U.S. is Argentina’s biggest market but sales here have slipped 8%.

More expensive wines are still being exported but they too are becoming harder to find.  Like other countries before them, Argentina established the category in the U.S. market with very good quality, inexpensive wines.   Consumers have come to expect a certain price point making it harder to get them to trade up.

Meanwhile, Argentina’s wineries wait for a more coherent economic policy that will enable them to once again export their wines profitably.