Argentina: Economics Will Continue To Boost Imports To America

I’ve pointed out in the past that Argentina is the only major wine-producing country whose currency has not stomped the U.S. Dollar. Combine that with Malbec’s surge (Malbec and Prosecco, the Americans’ favorite varietals) and it’s not hard to imagine that the next Yellow Tail could be coming from Mendoza.

Despite rosy projections from various wine industry experts, there continues to be a world-wide glut, especially Down Under. Just read browse the NewsFetch Archive and you’ll find a glut story from Australia and New Zealand on most days.

Down Under wine is not as big a threat in the U.S. market because of the strong dollar and because the Aussies and Kiwis are aggressively satisfying the growing demand for wine demand by the 2.5 billion people in China (1.33B)  and India (1.15B) —  36% of the world’s population.

Of course that means that the canny vintners Down Under are filling the demands of these emerging markets — locking up sales and distribution channels — even before U.S. vintners can get a clue about those markets.

But even with stronger currencies Down Under, the glut means that the U.S. wine market (more than 1/3 of which is owned by imports) will still see aggressive marketing from the Kiwis and Aussies.

ENTER THE ARGENTINES

The Economist has a fascinating piece that ranks which countries are at greatest risk of overheating. As the Economist chart clearly shows, Argentina is at the top of that list … and indicates that the ARG Peso may have a lot farther to fall. And that makes their wine a LOT more affordable in U.S. stores. It also means that U.S. growers will continue to have a tough row to how.