Argentines must have looked on in dismay when, earlier this year, Chile eclipsed Australia to become the world's fourth-biggest wine exporter in dollar terms. Every year, Argentina produces more wine than Chile, but Chile's smaller population consumes much less at home. Yet Argentina long ago surpassed Chile as an exporter to the United States - why couldn't it do so elsewhere as well?
Chile was the trailblazer for South American wine exports, starting in the early 1990s after the end of its military dictatorship. With low prices, aggressive marketing, and a transparent export regime, the country pushed its wines into markets around the world. But to this day, Chilean wines on shelves abroad are mostly cheap and undistinguished. Moreover, most come from just a handful of producers. For them, quantity has often overshadowed quality.
Argentine wineries have aspirations to do better, and to some degree they have in the United States. Once viewed merely as an alternative to cheap Chilean plonk, Argentina's wines have managed to climb the ladder and obtain higher prices. In 2013, wine imports from Argentina averaged $3.05 per liter versus $2.19 per liter for Chile. Part of the difference had to do with changes in taxes and exchange rates, but the gap was still strikingly large.
At least some of it must have had to do with quality. But this quality hasn't made a difference in the European Union, which imports six times as much wine from Chile as from Argentina. What can explain the discrepancy?
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