Exchange rate boost for Argentina’s wine producers
Scheme aimed at increasing overseas sales has been dubbed the “Malbec dollar”.
It may not receive widespread praise in rival wine-producing countries, but the Argentinean government has decided to offer its growers a preferential exchange rate in a bid to boost exports.
According to the Financial Times, the new rate dubbed the “Malbec dollar” will be introduced next month as the country’s inflation rate approaches 100 per cent; the move is both in response to the country’s financial problems and the extreme weather conditions that have affected recent harvests.
A mixture of high costs and the exchange rate have created “urgent” problems in the industry, with the president of the winegrowers’ association Bodegas de Argentina, Patricia Ortiz, telling the FT: “For higher-end wines there is still a [profit] margin. Where we’re losing out to other markets, like Chile and Spain, is with our bulk wines.”
The effect of the country’s financial woes on the export market has been marked, with the minister for energy and economy in Mendoza province, Enrique Vaquie, describing attempts to export wine as like “rowing through a river of dulce de leche”: the dulce de leche in question is the nation’s famed caramel sauce.
The actual rate has yet to be revealed, but as one of the world’s top ten wine exporters, any move to boost the market is sure to be welcomed by wine producers with overall production falling by a fifth in 2022. The inflation pressures in Argentina have seen the money made on each bottle sent overseas dropping by as much as a half since the end of 2021, and this year’s harvest is estimated as being one of the worst in a decade following adverse weather conditions.
The move by the government is the latest in a number of schemes applied to different industrial sectors in Argentina, with critics saying they are based as much around the upcoming general election as helping industry; voters go to the polls in October this year.