The UK director of Wines of Chile, the generic body representing the Chilean wine industry, claims that many producers are not making any money on their wines sold in the UK because the powerful multiple retailers keep prices low and are continually demanding discounts and promotions.
Michael Cox was speaking at the Wines of Chile tasting in London yesterday (September 9). He said: “I struggle to understand why the supermarkets are not trying to stretch the elasticity of wine prices. Why not see if they will pay more even in a recession?
“UK consumers are being ‘forced’ to buy cheap wine. Wine is aspirational, it should not be as cheap as chips. It should not be bargain basement,” Cox said.
The UK is Chile’s number one export market for wine by volume but the US is, or is about to become, number one in terms of value, according to Cox who has been WoC director for six years.
“The UK is not a profitable market for many Chilean producers. They are very few making much money out of this market. Nevertheless, the UK is still an important market for Chile. There is still potential here if you scratch the surface.”
He acknowledged that the US represents greater potential for Chile although its arch rival on the other side of the Andes, Argentina, has better image in the US than Chile.
Referring to Argentina’s reliance on the Malbec grape variety compared to Chile’s choice of varieties, styles and price points, Cox said that Chile has “more sharp arrows in its quiver than Argentina”.
Asked which grape variety or varieties, he would nominate for Chile’s future, Cox’s mantra was: “Syrah, syrah, syrah. Stylistically more Rhône than Barossa – and better for it. Also, for affordable Pinot Noir, Chile will be the country to beat. Chile is much more than just Merlot”
Cox concluded that while trading conditions were tough, after nearly 40 years in the drinks industry he has never been “more excited” about what he is doing.