If you are a citizen of New York, New Jersey, California, Texas, or Florida, and you have purchased a bottle of Cabernet by a vintner called Bodegas Escortihuela, then you are about to experience a fine Cabernet similar to that produced in California's Napa Valley or New York. In some stores, the wine is stocked in the premium sections, which would surprise a native from Argentina, since that is one of the nation's dependable wines, usually consumed by the lower classes who purchase the wine for the equivalent of US $1.50. Why, then, is that bottle you have before you selling for $18 to $24 in the U.S.? This paper will try to answer that question.
According to the United States Department of Agriculture (Gain Report AR0043) Argentina is the fourth largest wine producer in the world, and the largest in the Southern Hemisphere. The vintners typically harvest from April through May. Total Argentine wine production in the year 2000 is estimated to reach 13.8 million hectoliters (a hectoliter is 100 liters), a figure that will be down nearly 13 percent from 1999. (1)
The Andes-hugging states of Mendoza and San Juan account for 90 percent of the country's total output. Wine exports in 2000 are anticipated to increase, due to the expected greater wine supplies (production plus stocks).
Many factors affected the 1999 reduction in exports. They are, in descending order of importance: A) Bad weather for the 1998 crop; B) The fact that 60 percent of the country's wine production is consumed intra-country; C) Purchases by Japan based on the descending Yen decreased accordingly; and D) the country's government is trying to learn how to effectively deal with export problems while maintaining a level playing field for the growing number of wineries wishing to export.
The following table summarizes Argentina's 1999 exports. (2)
Table 1 -- Quantity, Number of Exporters, Type, Value
It should be noted that the Value figure o...