Chile: Trade Talk 4

WE ASKED: "Has 2006 been a crisis year for the jhilean wine industry?"

“I don’t see crisis – we have a strong peso and profits are down, but it was all a bit too easy for too long. In general, Chile still has a lot of ground to cover in terms of its business efficiencies. We are still a Third World country, which means that land and labour are still cheap, relatively speaking; but the current situation means that companies here have to look at whether they are spending their money efficiently and be even more careful where they are investing. If we are going to continue to play on a global level, then we have to look to the long term, rather than the short-term currency issues we are currently facing.”
Daniel Picciotto, director, Undurraga

“Yes, there has been a crisis, but it’s cyclical. Those of us who have been involved in this industry for a while know that these periods of crisis happen every four or five years, and you have to make your business decisions accordingly. We have to be more efficient and learn how to work in key export markets in a more streamlined way.”
Renato Guerra, executive director, Lauca Vineyards & Winery

“It depends on how you look at it. It’s good for our industry to have to face these issues; it forces us to approach the way we do business from different angles. Traditionally, Chile has not been very good at managing internal processes. What
we are now being forced to do is maximise potential in the vineyard, look at our margins internally and see where the areas are in which we can do things better.”
Ricardo Urresti, managing director, Errázuriz

“If you look at the export figures for Chile, you can see a concentration of business in countries like the US, the UK, Holland and Canada. That particular mix means that you have a business based at the volume end. What we have to do going forward is develop a healthier mix to avert real crisis in the future. The Chilean category needs to reduce its dependency on the supermarket end of the business and produce high-quality wines for the higher end of the market.”
Raúl Beckdorf, commercial manager, Anakena

“The industry is not in crisis. What we are experiencing are market conditions which are not suited to those wineries that do not have a good export base or strong distribution. External conditions such as the economic issue with the dollar mean that we have to reduce superfluous costs. Those companies that have not reacted quickly to this necessity will face their own commercial crisis. But those companies that can weather this will come out stronger and more able to react to demanding global market conditions.”
Mario Pablo Silva, managing director, Viña Casa Silva

© db September 2006