Price pressure will mean retailers have to rethink how they use Chile, though the on-trade will be less affected. That’s the analysis of Peter Greet, commercial director of Luis Felipe Edwards, one of Chile’s most influential wineries.
Chilean prices are being affected by what Greet calls the ‘triple whammy’ of duty rises, a weak Sterling and shortages of fruit caused by two smaller than expected vintages.
2016 looked like a bumper year, but was hit by rain at harvest which meant that a lot of fruit was unpickable, and ended up 15-20% below expectations. While 2017 was a naturally smaller vintage throughout the growing season, hit by frost and a dry summer, and was 25% below average size.
The combination of two short years on the trot has left wineries with little or no wine in reserve, and many are looking to eke out sales before replenishing their tanks in 2018 – a situation which is likely to mean price rises.
‘Retailers will have to rethink how Chile works,’ Greet told Imbibe. ‘Though in restaurants Chile can probably retain its position. It’s still the best producer of good quality entry level varieties at those prices.’