Spain wine producers seek bigger penetration of largest South American market

Thais Morais

Wine producers in Spain, a country that competes with France and Italy for the place of biggest world producer, want to increase the market share that they have in Brazil, the biggest imported wine market in South America and representing $300 million in annual revenue.

Antonio Correas, an official with the Spanish government agency in charge of promoting exports, told Latin Business News Daily on Wednesday by telephone from Sao Paulo that Spanish wine producers and the local Spanish consulate are working together to increase their share of the Brazilian market for imported wines from 6 percent to 10 percent within five years.

The campaign is mainly carried out in Sao Paulo, which accounts for about 80 percent of the country´s imported wine market, Correas said.

“Spanish wine has many competitors in Brazil," Correas said. "First, Brazil has its own wines and then the big leaders of the imported wine category are Chile and Argentina. Then come the other Europeans.”

Spanish wines are only in sixth place in terms of imports trailing other European wines from France, Portugal and Italy. Competing with France is difficult as the country's products enjoy high recognition worldwide. Then there is a large population of descendants of Portuguese and Italians, who are more familiar with wines from their countries of origin.

Competing with Argentine wines is difficult in part as the country enjoys tax benefits for being part of the Mercosur trade bloc. While Chilean wines do not enjoy as many tax incentives, they also have a geographical advantage.

However, Spanish wines have been gaining ground.

“We have seen that in the last years the Spanish wines are the ones which have seen the greatest increase in consumption,” Correas said. In recent years the share of the Brazilian market captured by Spanish wines doubled to 6 percent, Correas said.

Brazil only has a wine consumption rate of about two liters per person a year, which compares with 30 liters per person annually in Spain, Correas said.

“What makes the market attractive is the trend," Correas said. "It is a country where wine consumption is on the rise unlike in mature markets."

What Spain offers is a large diversity with some 80 varieties of grapes. Most people begin to explore wines from Spain by starting out with the most recognized Rioja region. The better known Spanish grape is called Tempranillo.

The effort in Brazil marks a change for Spanish exporters who had in the past targeted the bigger markets.
One effort that they are doing in Brazil is the use of social networks as the average age of the Brazilian consumer is lower, Correas said.

Two challenges faced by wine exporters are a weaker economy as well as the depreciation of the local currency, which makes imports more expensive.

According to recent import figures, wine imports in Brazil between January and July of this year are down 8 percent from the same period last year, Correas said.