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Wines of Chile opposes Brazil’s move to implement safeguards in wine market

  • Measure would restrict the number of cases exported to 2.5 million, 600,000 less than currently exported, generating first year losses of US$18 million and annual losses of US$50 million through 2020

Santiago, March 22, 2012. At a press conference on Thursday, Wines of Chile Vice President Mario Pablo Silva gave the organization’s official response to the news that Brazil plans to apply measures to safeguard wine imports.

Silva said the plan was an arbitrary measure that had been rejected by wine producers, as it would affect international competition and put them at a disadvantage in their fourth largest export market, where Chilean wine has a 32% share of value and 36% share of volume.

The measure was also a form of protectionism, he said, that would impact Brazilian consumers most of all by limiting their opportunity to choose and access wines of a higher price and quality, a sector in which Chile has experienced sustained growth.

The industry spokesperson called on the government to prioritize the issue and said he would not rule out approaching international institutions, including the World Wine Trade Group and the World Trade Organization, if the Brazilian measure is approved.

If approved, Chilean wine producers estimate that the 2.5 million case restriction – 600,000 cases less than were exported in 2011 – would generate losses of US$18 million in the first year alone, reaching US$50 million in annual losses through 2020.

Given what is at stake, Wines of Chile has formed a special committee to review the measure and has hired legal representation in Sao Paulo. It will also request that the government put the issue on the agenda for Brazilian President Dilma Rousseff’s visit to Chile in May, as it poses a threat to trade relations between the countries, which already highly favor Brazil.

The organization added that it has met with relevant players in the Brazilian market, including the Brazilian Association of Food and Beverage Exporters and Importers (A.B.B.A) and local winemakers, who have declared their opposition to the measure.

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