Concha y Toro holds its breath
Published:  05 December, 2008

Concha y Toro, South America's largest wine producer and owner of one of the world's largest wine brands Casillero del Diablo, holds its corporate breath as the ramifications of the collapse of US sub prime housing market and the worldwide credit crunch, work their way through the global economy.

Concha y Toro, South America's largest wine producer and owner of one of the world's largest wine brands Casillero del Diablo, holds its corporate breath as the ramifications of the collapse of US sub prime housing market and the worldwide credit crunch, work their way through the global economy.
Rafael Guilisasti, vice president of Viña Concha y Toro which is Chile's largest wine producer and number two in Argentina, told Drinks International that the company is protected because it exports to 129 markets and trades in a basket of currencies.
"Everyone has been suffering but it is too early to gauge consumer reactions. Maybe there is some sort of trade off, possibly trading down. The market seems flat but I think there will be more impact in the on-trade - some more affected than others depending on cultures of eating out," said Guilisasti.
Concha y Toro accounts for 17% of domestic sales, 7.3% of Chile’s current export market and 8% of Argentina’s annual production. Its major export markets are the UK (45%), US (39) and Canada (34). Thirty-five percent of revenue is traded in US dollars, 21% in sterling, 20% in the Euro and 4.3% in Canadian dollars.
"Our aim is to diversify so we can manage the ups and downs and not suffer from any particular market. We try and keep costs down while focusing on size and scale. We keep volumes in line with distribution – Chile has never been in a position of oversupply – and we have brands at every price point," said Guilisasti.
Its major brand is Casillero del Diablo  which is now a 2.9m case global brand. It retails for approximately E6.99. Seventy per cent of the company's volume is in red wine, principally Cabernet Sauvignon, Merlot, Carmenère, Syrah and "a little bit of Pinot Noir".
Guilisasti said that there has been a shift in emphasis by Chilean growers to cooler climate regions, either at altitude or with pronounced sea influence, to produce more elegant, more complex wines. To that end Concha y Toro has a new winery, Maycas, in the  Limari valley to the north with a good water supply which has been set up to produce cool climate, super premium wines.




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