March 15, 2011 / 10:18 AM / 8 years ago

Argentine winemakers set sights on Asian markets

MENDOZA, Argentina (Reuters Life!) - Winemakers in Mendoza, where prized Malbec vines grow beneath Andean peaks, celebrated the end of grape-picking this month with a traditional parade of harvest queens and floats laden with flowers.

But with festivities over for another year, Argentine vineyards have turned their attention to capturing relatively new Asian markets where burgeoning middle-classes are rapidly acquiring a taste for wine.

“Today China consumes less than a liter of wine per person per year,” said Cristina Brachetta, director of the Argentine Winemakers’ Corporation, which is leading a state plan to boost annual sales to $2 billion by 2020.

“That makes it a target with lots of potential,” Brachetta added.

Mendoza produces 90 percent of the South American country’s wine. Besides Malbec, Argentina’s most famous grape variety, lesser-known Bonarda and Torrontes wines thrive on sunny plains that stretch out below the snow-capped Andes.

Argentine wines attracted international attention when they became exceptionally good value following a sharp devaluation of the country’s currency during the 2001/02 economic crisis.

Today about 20 percent of wine is sold abroad and last year exports reached a record $857 million, but only about 5 percent of the wine shipments went to Asia, data from Mendoza-based consultancy Caucasia Wine Thinking shows.

Argentina overtook Chile, its closest Latin American winemaking rival, as a supplier to the United States.

But it lags its neighbor in capturing fledgling Asian markets, selling just $10 million in wine last year to China, its second-biggest trade partner.

Producers in Mendoza hope to double that figure in 2011, focusing their drive to boost sales on young Chinese professionals, who are often more familiar with French wines.

“We’re already present in specialized liquor stores in China,” said Patricio Reich, an owner of Renacer winery in Mendoza, which also exports to South Korea, Taiwan and Hong Kong.

Shanghai will be the “logistical center” for Argentine wine distribution in Asia, Agriculture Minister Julian Dominguez said during the grape harvest festivities.

Argentine winemakers also want to boost exports to more established wine importers, such as Canada, Britain and the United States, but they are especially optimistic for sales in China due to brisk economic growth.

“Besides, the Chinese are very fashion-conscious (and) they’re drinking ever more wine,” said Mario Giordano, head of Argentine Wines, another industry group.

Writing by James Matthews; editing by Patricia Reaney

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