President Of Asociacion Vitivinicola Argentina (N/A)

Q-1: According to my information, the Asociacion Vitivinicola Argentina was founded in the year 1904. Can you tell us a little more about the history of this association? A-1: Well, this association began when some Argentinean wineries realised that they would have to work together in order to promote their products. At this moment, 35 of the most important wineries are our members. This association covers all the country because we represent vineyards from San Juan, Mendoza, Salta, Rio Negro and La Rioja. We will be also merging with the Centro de Bodegueros de Mendoza in one or two months. We think that this new association would give us the chance to obtain the 90% of the exporting wineries. During the seventies, the wine consumption was around the 93 litres per capita in Argentina. At this moment, this number decreased in less than 40 litres per capita. The reason is that the Argentineans are now drinking less but better wine. Another explanation is that the competition with the soft drinks and the beer became much harder. On the other hand, the consumption of fine wines was growing. So with the fall of the table wine, the industry began to think about the possibility of exporting these kinds of products. The world did not know that Argentina has a good quality of wines. It was very difficult to introduce our wines in the international markets. Q-2: You had already mentioned that the association promotes the Argentinean wines abroad. How often do you organise wine exhibitions? What other activities does the association do in order to promote these products and to attract foreign investors to Argentina? A-2: Our members started to think what they could do in order to promote and export their wines. When we had the opportunity to enter to the international wine markets, we realised that we have two different possibilities. The first one is to present Argentina as a country that produces a very good quality of wines. On the other hand, we realised that we needed to invest a lot of money in machinery if we wanted to meet foreign wineries. We have invested more than 500 million dollars in machinery during the last ten years. The problem is that if you plant grapes in a virgin land, you will have to wait four or five years to produce wine. I am also the president of the National Commission of Fine Exporting Wines. The Commission began its activities in 1994 and we have exported around 35 million dollars of wine. In 1998, the exportation increased to 100 million dollars. On the other hand, in the years 1999 and 2000 the exportation decreased because Japan bought big quantities of wines all around the world. So the stocks were all sold. I hope that the exports would continue growing. We know that this is very difficult at the moment because there are many countries- especially Chile, New Zealand, Australia, South Africa and the United States- that are thinking about selling their own wines. So the competition is very hard. I think that Argentina is prepared to compete with them because we have planted more than 30,000 hectares of a fine variety of grapes in the last four or five years. When Argentina was ready to export ten years ago, Chile was not able to do it. Chile is now beginning to export their wines but this country has a problem: there are no more lands available to plant new vineyards. There are a lot of new wineries that had established in Mendoza in the last four years. Q-3: What would you say are the main differences of your members actual situation compared to the one they had ten years ago? A-3: The situation is now completely different because some foreign companies own lots of wineries. Their traditional owners are disappearing. I can talk about Lagarde, Bianchi, and Lavaque that are big and important wineries. Some of them have changed because they are now depending on international founds. Q-4: How would you describe the relationship between the traditional owners and the new companies from France, Spain, etc? A-4: The people who invest money in Argentina are normally thinking about exporting their wines. There are foreign companies that are very strong in the domestic market like Santa Ana and Michel Torino. I think that the traditional companies are important in this industry because its history is valuable. The wine industry is not used to face these kinds of changes. A family company thinks about having different representatives all around the world. These are long term strategies. In this industry, long term strategies are very important. Q-5: What are you main sources of capital: the money from your members or the public sector? A-5: The idea to found the National Commission of Fine Exporting Wines came from the wineries, Fundacion Export Ar and Pro Mendoza- which is a mixed association between the government and the private sector from this province. They finance these activities. This commission has 50 members. It is easier for these wineries to sell their products abroad because it is very difficult and expensive to introduce them in a liquor store or in a restaurant. The commission had also invited some foreign journalists to come and visit Argentina. The idea was to show them this country and its people. We took them to the wineries to learn about its production. The results were very important because we could read in lots of foreign magazines something about Argentina. They talked about the good quality of our wines and the new investments in this industry. Q-6: What is the tradition of Bodegas Lavaque? A-6: I used to be the owner of Santa Ana but I sold the company to the DAJ Group. Lavaque was the owner of Michel Torino and also sold it to this group. I am a very close friend of the Lavaque family. I sold Santa Ana because I did not want to work in this industry anymore but my friend asked me to work with him in order to export Michel Torino wines. He has the most important Argentinean wine companies. Bodegas Lavaque is placed in San Rafael, Mendoza. On the other hand, Santa Ana has a very big plant with more than 400 hectares. Rodolfo Lavaque is very confident about this industry. So he sold Michel Torino but he reinvested this money on his traditional winery. Q-7: How long have you been working in this industry? A-7: I do not remember because my grandfather bought the Santa Ana vineyards in 1935. I began to work in this industry after I finished my career in 1962. Q-8: What do you foresee about the wine industry in five years from now? I am talking in terms of figures, production, exports, etc. A-8: I think that we will continue growing in the segment of fine wines because we are doing our best efforts to introduce the Argentinean wines in the entire world. On the other hand, we are competing with Spain in the segment of the sparkling wines. They export this product to the United States at a very good price. Anyway, there are many Argentinean wineries that produce sparkling wines. So I think that we can reach good figures with these products. We can also sell the table wines to our neighbouring countries like Paraguay, Brazil, Ecuador, and Colombia. Although the exportation figures of the table wines are not so important, I am very optimist about them. The Argentinean wines have only the 2% of the international markets. This figure can be doubled. It is possible for Argentina to duplicate its exports in four or five year’s time. Q-9: What would you do in order to restore the image of the Argentinean wines abroad? What is the problem of these wines? A-9: The idea is to show that Argentina is a very good place to produce wine. We have excellent clime conditions. We can also use the water from Los Andes Mountains to irrigate the vineyards. This is very pure water. We do not use big volumes of pesticides. Lavaque produces organic wines in Cafayate, Salta. These kinds of wines are now been required in the entire European continent. NOTE: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions.