Focus on: The Brazilian wine market

23 March, 2012

The petition is applied only against vinifera-based still wines (it does not consider the boom in consumption for domestic sparkling wines over the past five years). It compares domestic wines alongside imports, stating that they are "similar or directly concurrent". Once again, the conclusions are built upon a narrow interpretation, using only technical definitions such as "wines made from fermented, freshly pressed grapes, which may be matured in barrels or aged in bottles". While this may be correct at the most basic level, I am yet to come across a Brazilian Pinot Noir that tastes remotely like a Gevrey-Chambertin, a Brazilian Riesling comparable to those of the Mosel or Rheingau, or a Brazilian Sauvingon Blanc with the zest of a good example from Marlborough. It also makes no consideration of the diverse array of wines not produced in Brazil, be they Nebbiolo, Mourvedre or Zinfandel.

Furthermore, the circular claims that the large increase in imports entering Brazil in the year-ending 2010 was driven by the international financial crisis, with producers in all quarters of the globe seeking to re-direct their sales to Brazil as other traditional markets fell into crisis. While this may be partly true, the circular does not mention that many Brazilian importers were also rushing to import wines into Brazil to head off a soon-to-be-introduced fiscal seal, earmarked for launch in January 2011. This seal, which belatedly came into affect early in 2012, was the product of earlier lobbying from these same large producers and cooperatives, worryingly proof that they have a government receptive to their complaints.

One of the motives for introducing such "safeguards" discussed in section 10 of the circular is to allow time and revenue for a "competitive restructuring" of national wine production. Making their objective clear, the large producers and cooperatives wish to push production from traditional vineyard areas into new, relatively flat areas which will allow for the intensification of plantings, the possibility of optimising machinery, installing irrigation systems and anti-hail screens, leading to an overall reduction in production costs of 35%.

The notable absence of the phrase "improve quality" anywhere in this section of the circular is a concern. It is not only a worry for Brazilian consumers who enjoy a greater range of imported wines today than in the past, but also for the smaller, quality-driven Brazilian producers who are trying to overcome years of stigma associated with cheap non-vinifera domestic wines which gave "vinho nacional" a bad name.

These quality-oriented producers may deserve the support of their government, but this need not be through the punitive protectionist measures such as those proposed. Value-added tax (ICMS) on all wines, regardless of their origin, is currently levied at 25% in some states of Brazil, and a tax-break for these producers would be a more suitable alternative.

Predictably, the announcement of the consultation has had a strong response among Brazil's community of importers, retailers and oenophiles. Ciro de Campos Lilla, president of leading importers Mistral and Vinci, claims that the adoption of such measures "would return Brazil to a market seen twenty years ago with fewer options for consumers, many of which of questionable quality". "We will lose all of the effort, work and improvement obtained in the interim."

Many have called for a boycott of wines produced by those responsible for the circular. Roberta Sudbrack, one of Brazil's most renowned chefs, claimed on her Facebook page that she has taken Casa Valduga and Dal Pizzol off the wine list at her eponymously-named restaurant in Rio de Janeiro in support of the protests.

For the future development of the Brazilian wine market, one can only hope that sufficient pressure is applied on the government, both from within Brazil and from concerned producers and wine lovers abroad, to head off such short-sighted protectionist measures. Interested parties have until mid-April to present alternative arguments (in Portuguese) to the MDIC.

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