Chile faces “structural deficit”

Chile must embark on an aggressive planting programme if its production is to keep pace with the country’s export growth, according to a number of major producers.

One of the strongest advocates for this approach is Luis Felipe Edwards Jr, managing director of his family firm Luis Felipe Edwards. Speaking to the drinks business, he maintained: “You cannot be profitable without your own grapes.”

As a result, the company is planting 400 hectares of vineyard this year alone, with the aim of adding a total of 1,500ha by 2014.

Edwards claimed that increased vineyard area will help alleviate some of the pressures which have forced a widespread price hike from Chilean producers this year. In all, the former investment banker calculates the country’s “structural deficit of wine” at 25,000ha and growing.

A number of other producers are also embarking on similar expansion programmes. At Carta Vieja, export director Fernando Vargas, outlined plans to invest US$10 million in vineyard purchases over the next four years, which will allow the company to purchase “premium terroir” in Peumo, Alta Maipo, Leyda and Limari.

Meanwhile Miguel Torres Jr, executive president of Miguel Torres Chile, also revealed extensive expansion plans in order to help the company cope with “double digit growth every year for the last five years.”

He elaborated: “Next year we are planting around 70ha of our own vineyards and also increasing the number of long-term contracts in more regions.”

Data from Wines of Chile shows that exports to the UK, its biggest market for bottled wine, almost doubled between 2003 and 2011.

For a full update on the Chilean wine market, see this month’s issue of the drinks business.