The effect is especially felt in Mendoza, the main wine-producing province of the country: there is a shortage that is estimated between 20% and 30% of the containers that the sector needs due to high demand and low production. What are the causes and consequences, the expectations for the future and the alternatives considered by the main players in the wine industry.
Mendoza, in the west of the country, concentrates 70% of the winemaking in Argentina, especially recognized worldwide for its flagship varietal, Malbec. After having passed an excellent 2020 in economic terms, with a significant increase in the consumption of the drink per capita in the country and in exports, the sector is going through a process of uncertainty and crisis due to the lack of production of glass bottles in territory, to which are added the difficulties to import.
The problems are already having a negative impact not only on the arrival of wines to the gondolas of the main shops in the world at the end of the year festivities – when wineries tend to significantly increase their sales abroad – but also on the future elaboration, since it is necessary in these months to “release” the stored wine by fractioning it into bottles or by selling wine in bulk.
Bodegueros, provincial government officials and business chambers agree that the effects of the Covid-19 pandemic contributed to the problem after a significant drop in production in glass factories for several months due to restrictions (although at present they have recovered moderately its activity) and in the face of an increase in wine consumption at that time.
But the inconveniences were aggravated on September 19, when a glass bottle-making furnace in Verallia, one of the country’s most important factories – based in Mendoza – caught fire, resulting in an alarming drop in production. , in a year that also had as a counterpart an intense excess demand for bottles from the wineries.
“Weeks ago there were bottle reserves, but now there are several wineries that do not have stock”
Viticulture is the most important economic activity in the province of Mendoza: it generates income in exports of 655 million euros per year, according to data from the International Organization of Vine and Wine (OIV). By 2020, wine exports had reached the highest volume in 12 years. And within Argentina, according to data from the National Institute of Viticulture (INV), consumption increased from 18 to 22 liters per capita in 2020, although this number will fall in 2021, especially due to the increase in the price of wine and the decline in power. purchasing power of families, the result of the economic crisis and devaluation.
“In Argentina there is a particularity. Wine is consumed more at home, with the family, than in meetings with friends; and the reverse is the case with beer. That is why when we were ‘locked up’, the consumption of wine in the country increased”, explained Sergio Villanueva, manager of the Unión Vitivinícola Argentina (UVA), which is also a member of the Corporación Vitivinícola Argentina (Coviar).
Villanueva told France 24 that while it is difficult to establish how much the exact bottle deficit is, it could currently approach 20 to 30 million a month, considering that the sector uses about 1 billion bottles a year. . Meanwhile, for Patricia Ortiz, president of Bodegas de Argentina (BdA) and owner of Bodega Tapiz, the deficit is close to 20 million bottles per month and it was in November that “the crisis began to explode.” “Weeks ago there were bottle reserves, but now there are several wineries that have no stock,” he said, which has resulted in companies making the decision to sell the wine in bulk, that is, without fractioning.
According to the businesswoman, this may be one of the few outlets that wineries have, but she considered that “they are not positive”, since “the Mendoza brand is lost, which is to elaborate, produce and divide in Argentina.” Meanwhile, he also expressed that less labor is required, taking into account that with bulk sales, all the work of fractioning and labeling the wine, buying corks, capsules and also boxes is consequently dispensed with. And, furthermore, when exporting in bulk they stop earning between double and triple the added value that can be achieved by selling already bottled wine abroad.
“Until April 2022 clear bottles are no longer available, which are those used for white wines, so a ‘plan B’ is already being sought,” said Ortiz. This has caused several wineries to decide to discontinue some of their products, while others had to reject sales abroad due to the lack of packaging.
For Villanueva, it is a possibility that the shortage has an impact on the smaller wineries, especially since the end of the year is when the product is most exported to shops around the world to be on the gondolas during the last weeks of the year, the time of parties. It also has a stronger impact on these smaller entities because they usually do not have high levels of container stock and because the purchase is significantly less than those of the larger ones.
They manage the purchase of 15 million bottles from Tunisia
Martín Hinojosa, president of INV, assured that this problem has been tried to appease with actions of the provincial and national governments, as well as from the organizations that group several wineries in Argentina. “We have worked against the clock with the Ministry of Agriculture at the national level because for many wineries export is vital. Those that at the end of November have not been able to solve the issue of shipping, can hardly be in the shops of the world at the end of December for the bureaucracy of customs procedures and shipping times, “Hinojosa warned.
From the INV, agreements were made with another glass company in Mendoza, Cattorini, for 2 million bottles, so that small and medium-sized companies could access between October and November and thus arrive in time to export. Meanwhile, the provincial government, in conjunction with the Mendoza Fiduciaria institution, has done the same with 1.5 million bottles also for small companies. However, it is possible that small family companies have lost ground and their exports arrive to a lesser extent and with greater delay already by 2022.
The provincial Ministry of Economy also went out to look for markets to import bottles and hopes to make a purchase of 15 million containers from Tunisia, free of internal taxes, which are around 13%. However, it has not yet been possible to agree with the national government on the temporary tax relief, explained Sergio Moralejo, Mendoza’s undersecretary of Agriculture.
Migrate from the glass bottle to the aluminum cans and the tetra-brik
Although Hinojosa hopes that as the weeks go by the situation improves, for Villanueva the problem will persist even when Verallia finishes solving the impact of the fire in one of its furnaces, and despite the fact that Cattorini has opened a furnace this year with a production of 14 million bottles per year. It must also be borne in mind that one of the Verallia ovens will not be active between January and February due to maintenance.
Among alternatives to this predicament, Villanueva assured the need to deepen through marketing strategies and a “great job” of awareness, the change of perspective on the glass bottle in the feelings of the people, and give way to other types of packaging , either the aluminum can, as well as the tetra-brik carton. “Today the tetra-brik is associated with table wines (a mixture of Creole and varietal grapes) but there are already several wineries that aim to commercialize varietals in this container. Except for high-quality wines that need from the glass bottle, it will be necessary to migrate part of the production that today uses glass bottles, ”he explained.
“The important thing is not to lose markets that have taken us years to get, due to a temporary problem,” warned Moralejo, the head of the Mendoza Agriculture portfolio. He is one of those who believe that, although it is important to advance in new models of presentation of the drink, the bottle of wine has its own delicate symbolic value, which accompanies the quality of the wine and which is already ingrained worldwide.
.