Power Crisis may raise price of Argentinian wine

  • Thursday 5 August 2004

The energy crisis in Argentina will cause an increase in wine prices of up to 15% according to sources in the industrial sector.

The lack of natural gas has had a direct impact on must and glass suppliers, who have had to use alternative sources of energy up to seven times more expensive. The constantly increasing price of energy also accounts for a significant rise in winemaking costs.

Wine bottles are the hardest hit. Glass suppliers use natural gas as a main source of energy, representing almost 5% of the cost of each bottle.

Not only is the price of gas increasing, but supply has also been reduced. Bottle manufacturers have had to look to alternative sources, in some cases using fuel oil, which is several times more expensive.

Cattorini, one of the biggest glass suppliers in Argentina, has already announced a 15% increase in the final price of its bottles. Wineries will have to decide whether to absorb the extra cost themselves or raise the price of their wines.

Power cuts are another problem. Energy consumption has been increasing but electrical companies have not made any investments since 1998. The impact on the wine industry, however, will be moderate, since wineries use little energy during wintertime.

The minister of Economy, Roberto Lavagna, announced that over $2,000 millon will be devoted to facing the energy crisis.

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