Chilean Wine Brands Taking a Beating

Chilean Wine Brands Taking a Beating

Similar to how dollar and discount stores are thriving in the ongoing recessionary climate, people are drinking just as much as ever – if not more – only, they’re selecting cheaper varieties.

And these varieties are not limited to domestic sources. Foreigners are actually drinking more Chilean wine than ever, with shipments up nearly 18 percent in 2009, as opposed to California wineries, whose 2009 shipments dropped by 4 million cases, according to consulting firm Gomberg, Fredrikson & Associates.

The problem is that people are choosing cheaper vintages, preventing Chile’s wine brands from being able to “break out of the $10- to $20-per-bottle price point,” said Bill Crowley, professor emeritus at Sonoma State University.

A few years back, the Chilean wine industry decided to simultaneously curb supply and fund a global campaign aimed at promoting their wares, all in the name of achieving higher prices.

But the recession destroyed this goal, and currently the industry is in something of a holding pattern. Making matters worse are the vinters who are selling in bulk to compete with countries like Argentina, Australia, and South Africa – all of whom are fighting for a share of the low-end wine trade.

This means that when the recession finally lifts, the quality that Chilean wineries were hoping to embody may be tarnished. Sounds like these guys could use a drink.

Source :: brandchannel