Argentine wine producers look to break through £5 barrier

Published: 17 September, 2008

Argentina might have increased the value of its wine exports to the UK by more than one-third in the last 18 months, but it is still proving difficult to persuade consumers to buy into the £5-plus category.

Exports to the UK have grown by 37.5% since the Wines of Argentina campaign began early last year but Argentina still only accounts for around 1.5% of the take-home market by value.

James Forbes, UK director of Wines of Argentina, believes Argentina is on the "right track" in the UK, even in the "notoriously competitive area" of the major supermarkets.

The Wines of Argentina annual tasting, being held today (Wednesday) at Lord's Cricket Ground in London, hosted a record 87 producers, which is said to be the largest gathering of Argentine wine ever seen outside the country itself.

Argentina is said to have plus points in the proliferation of organic wines, while the country's wine producers have made Malbec the signature grape variety for their red wines.

Pernod Ricard UK has ambitious plans to develop Graffigna with renewed focus as it sees Argentine wine as a "priority market" and it wants to develop the brand in the same way it has done with Jacob's Creek in the Australian wine category and Campo Viejo in the Spanish wine sector.

Paul Waddingham, key account manager at wine distributor Les Grand Chais de France, said attracting consumers above £5 in Argentina was proving "extremely difficult", while the lack of a well-known brand was holding back the category.

He said the Lord's tasting proved there were many producers and UK distributors willing to try and develop brands. "The question is can they make any money out of it? To get the critical mass and build a brand you have to invest in it without damaging the quality of the wine," he said.

Les Grand Chais de France, which handles the Argentine wines from Finca La Celia in the UK, has supermarket listings for wines such as Furia and La Celia. Waddingham said current exchange rates were making it difficult for some wine exporters to hit the prices needed in the UK to drive sales.

The wide availability of organic wines in Argentina could prove to be an advantage if consumers become concerned about the contents of their favourite wines, especially in the light of the Channel 4 Dispatches programme this week.

"It will make people think about their wine," said Marianne Fillion, new product development manager at UK importer Ehrmanns. Before the programme, she said, most people would have seen wine as a "natural product". "It might start to make them think," she said.

Ehrmanns used today's tasting to launch a new organic range from Argentina, called Organico by Elementos, and the four single varietal wines are being targeted at UK supermarkets with a £5.99 price ticket.

Origin Wines also used the event to showcase its re-launched Camden Park brand - the production of which it recently moved from Australia to Argentina.