Concha y Toro reveals full impact of earthquake

The massive earthquake that hit Chile in February contributed to one of the country’s top wine producers posting a profits decline of 26.7% for the first quarter of the year.

Concha y Toro saw net profit fall to USD$12.4 million from $16.7m and net sales slip 1.8% on the year after a fall in export volumes brought about by the effects of the quake.

The company, which owns the Casillero del Diablo brand, said it lost 22.8m litres of wine when the earthquake struck the South American country’s southern regions, where the majority of the wine producer’s production facilities and vineyards are located.

Production was stopped for 10 days after the quake hit and the losses amounted to almost 10% of the company’s stock.

The producer also witnessed a negative impact from the sharp appreciation of the Chilean peso against major currencies such as the dollar, pound and euro, especially with over 68% of the company’s exports going to the US, continental Europe and the UK.

A statement from Concha y Toro said: “It is important to point out that all the company’s assets are covered by insurance, including losses due to stoppages.”

Export sales fell 5% to 29.9m litres, but domestic sales rose 11.4% to 15.7m litres.

In better news for the wine maker, it has signed a three year deal with English Premier League football giants Manchester United that will see the company become the club’s Official Wine Partner.

As part of the deal Concha y Toro products will be served in lounges, boxes and bars at the club’s Old Trafford stadium from the beginning of next season.

Speaking of the partnership, United manager Sir Alex Ferguson said "Like United, it’s a company with a lot of history that, while never afraid to change, has always kept hold of its roots.

“This is a partnership that unites the two great passions in Latin America: football and wine. I’m looking forward to it."

Concha y Toro marketing director Giancarlo Bianchetti added "Our new partnership with Manchester United is absolutely aligned with Concha y Toro’s long term strategy to increase awareness and penetration of our brands worldwide.

“We wanted to find a partner who shared our commitment to excellence and Manchester United Football Club has developed an immensely powerful global brand.

"We intend to activate the partnership in a variety of ways around the world, using strategies and tactics which best suit each market."

Alan Lodge, 02.06.2010