Expert: Davide Andrew Papa - 3/28/2006

Question
Sr: I want to do a project about argentinian and chilean wines,specially why chilean wines get more in the EU market than the argentinian one.Which could be the reason for it?What is the different between them?Which is the problem for the argentinian wines to get in the EU market?Sorry to bother you with it,but I need to find out information about it and thought you would be really ussefull.I appreciate it very much.My best Regards.
Roberto Blanco.

Answer
Dear  Roberto-

We deal in export questions- there are many hints to your question in all the answers given to previous wine question- Look then at them to help give you insight- But i will help a little- the rest is based in your ability to do research on the net-

Look at key words such as-
*Import laws
*custom rules
*Import charges and taxes
*ECC subsidy for wines
*Chemcial additives
*Price comparison versus quality/quantity

etc..etc...

(1)For Instance a Democratic Government doing business in another Deocratic country, may favour a particiular importer against another importer.? For example Its difficult for Iran to sell anything into the USA due to the USA bank embargo on Irainan banks- But its easy for CUBA to sell goods to Venezuela  and to China and not at all to the USA-

and where USA does do plenty of Business with Venezuela

Italy would favour doing buiness with Tripoli over lets say Bulgaria

(2) Do research- For intance a Country that produces much wine would find if very difficult to sell such wine into another country which also produces much wines- Protectionism of a local industry is always an issue-Australia is a big wine producing country- but wages and social conditions are high - Our wines would be more expensive to produce than lets say Chilean wines- Hence to Protect grape and Wine producers in Australia- if One Imports Chilean wine into the country, then CUSTOM will impose a very large IMPORT duty on the Chilean wine , that simply makes is unprofitable to import such wine-for retail sales-

If a good local bottle of wine is lets say 10 dollars then the imported wine could be even a  higher price even though the price to produce it is much cheaper-

Many Governement protect many industries this way-

(3) Check up about subsidy- Eg- World sugar prices are lets say $450 per metric tonne- Yet a country like Brazil could sell the sugar for $350 MT why???- Many Government assist their primary producers with disclosed or even SECRET or ILLEGAL  subsidies- The government of Brazil may pay the $100 per tonne in a  subsidy for the refinery expense of getting the sugar to the nearest port- hence they sell the sudar for $350 per MT and get another 100 per MT from the government- this way many jobs remain protected in the main industry of a particular country-

So you have to check if subsidies are being applied to Chilean wines being sold in the EU- where maybe no such subsidy is payable for Intercontinental exports-

etc..etc..

(4) Quarantine-Find out if there has been any health issues for a particular producrt, find out if the bottle of wine contains banned anti oxidants-for instance Sulphur is an restricted product in wines if it were sold to the USA - ECC has many restrictions of such chemicals being imported in products-

I hope the above is of some help-

kind Regards-
Davide Giovanni Papa
www.ftnexporting.freeservers.com