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 Fiesta de la Vendimia is the National Grape Harvest Festival held in Mendoza every year at the harvest time. The 10-day world-famous event attracts a global presence with the splurging tourists. It is such an important event for Mendoza that the dates for the next 10 years have already been announced. The 79th edition is already slated for March 1-10 this year.
The protest to cancel it this year was apparently because of the government’s failure to act on the promises made to financially assist the struggling industry. National and local politicians had made promises to provide the sector with financial aid to assist with this year’s harvest which, like India, is due in a few weeks. President Cristina Fernandez de Kirchner had even committed to provide $50 million Pesos (ARS), equivalent to US 5.8 million, from the Mendoza Fiduciary Trust to buy up excess stock and stop the price slide that has resulted from a steep fall in exports.
Australia is not the only exporting country hit hard with the wine glut due to fall in export and reduced domestic market. Besides several other countries, the Argentine wine sector has also seen a fall in exports which fell for the first time in a decade from US $918 million to US $866 million and further to an estimated US $823 million in 2014.
The industry has also been hit by a high inflation of over 20% last year, tight credit and an unfavourable exchange rate. While officially the dollar is pegged at ARS $8.60 it can fetch ARS$ 13.59 in the parallel, black market the Indians might still be well aware of, as many suffered it during the pre-liberalisation era when the black market in foreign currency was rampant. Since it’s mandatory to bring back all the export dollars and convert the money at official rates, the exporters are obliged to forego a loss of ARS $5 for the export of every US dollar, a loss of 58% in the purchasing power. The producers have been so badly hurt that they don’t have money for the harvest next month.
Argentina made an overseas reputation with good wines at low prices, a segment of the market that is increasingly difficult for its industry to service, as the country's wider economic crisis sparks steep cost increases for essentials such as vineyard treatments, oak barrels, and bottles. The wine industry in Argentina represents 1.3 percent of overall GDP and the 1300 wineries provide direct and indirect employment for more than 400,000 people.
Susana Balbo is the second- term president of the Wines of Argentina –an export promotion and marketing body. She was a VIP -fellow judge with me at the last edition of HKIWSC, Hong Kong and owns Domino del Plata winery and also exports premium wine to India through the Wine Park in Mumbai. She says, “There are few companies with the scale to export lower-priced wines. And in the domestic market we are also tight because of the cost increases due to inflation and the consumers will not accept the sort of price rises we need to make."
Meanwhile, the grape growers plan to meet today to decide the future course of action. The provincial governor Francisco Pérez had refused to meet the Protesters on Friday. He was in the building but communicated through the tweeted messages instead. The protesters ended up splashing wine around the entrance to the City Hall and leaving a petition demanding action. They wanted to cancel the Fiesta de la Vendimia, on which the provincial government spends a sizable amount of money, arguing that without aid there would be no harvest.
Interestingly, it was the same President Cristina Fernandez de Kirchner who issued the presidential decree that declared wine as the national beverage on the 24th of November 2010, “Argentinean wine is an honourable ambassador in the world because it brings pride to Argentines who drink the same wines they export and it gives prestige to the country in every continent”. Hopefully, she will hear their desperate pleas.
Subhash Arora |