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Concha y Toro to build on sales lift

Published:  23 July, 2008

Chilean wine producer Concha y Toro has announced a rise in sales for 2006, despite a fall in income for the year.

Its financial results for 2006 showed total sales were up 5% but net income was down 16%.

Exports have driven growth - increasing 16.8% by value, from U$215m (111m) to U$251m (130m) and 9.9% by volume, from 10.54m cases to 11.59m cases. Revenue for UK exports was up 45% with more than

1.8 million cases of Casillero del Diablo sold.

The addition of the Cono Sur range to the Concha Y Toro portfolio in May has contributed to positive UK sales figures.

Its Argentinian subsidiary Via Trivento has also seen significant growth, increasing export volumes by 14%, but sales in the UK have not been so impressive.

Cristin Lpez, managing director of Concha Y Toro UK, said: It's tough selling Argentinian wine. The trade had massive expectations but it's been a typical Latino disappointment. We need brand leaders to drive the market and we're currently developing a new product to do that.'

Positive export performances were offset by the strength of the Chilean peso. Michael Cox, director of Wines of Chile UK, said: The Chilean economy has been strengthened by copper exports which are at an all-time high. Coupled with a weak US dollar, it's having quite an impact on the profitability of Chilean exports.'

Lopez said: The peso strength has hit Chile but we're still doing well. 2005 and 2006 were a test for companies to adapt and those that have survived will be fine. People should just accept it and move on - every country has its challenges but there are more reasons to smile than cry.'

On the Chilean domestic market, there was a 4.3% rise in volumes but total sales were down by 5.8% due to by a decline in the average price. The price cuts have been attributed to the lower cost of the 2006 harvest.

In 2007, Concha Y Toro will relaunch its Frontera range after commissioning Wine Intelligence to research its current packaging, although the findings have not yet been announced. It hopes sales will reach 500,000 cases and that it will improve its rate of off-promotion sales.