Argentine Vintners Pour More In Local Market As Costs Rise

(Dow Jones)--Argentina's wine industry is booming as connoisseurs across the globe fill their carafes with the country's famed Malbec. But high inflation has spurred vintners to increasingly turn to the local market where they can more easily pass on rising costs to consumers. With production costs surging and consumer purchasing power on the rise at home, wine makers can more easily raise prices on Argentines who are more accustomed to high inflation. "A number of vineyards that set themselves up for the export market are now trying to sell locally so they can pass on inflation," said Ian Mount, U.S. journalist and author of The Vineyard at the End of the World. "The winemakers have three options in the face of steep inflation--raise prices, lower quality, or get out of the export market. All three are bad options, as they can cause a loss of market share, reputation or their place on the shelf," said Mount, whose book chronicles the history of Argentina's famed Malbec wines. For now, the wineries are largely swallowing the higher costs, said Daniel Karlin, chief executive of Anuva Wines, which sells Argentine wine to the U.S. "The smart ones know how stiff the competition is in the U.S." he said. "If they move prices by more than a couple percentage points, they're going to lose market share pretty quickly."

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