The Brazilian and Argentinian authorities are locked in negotiations to end the growing conflict between their wine makers.

Brazilians growers are worried about the strong sales of cheap Argentinian wines in their country, and are demanding that the government introduces protectionist measures.

They are asking for import limits on wines below a certain price – a request which has been rejected by Argentina, automatic taxes on all foreign wines, and the creation of a development fund for educating consumers about the consumption of Brazilian wines.

Eleven million litres of Argentinian wine were sold in Brazil in 2004, and this figure is set to reach 20m litres this year, according to Argentinian journal Los Andes. This in a country where the population currently drinks only 1.8 litres per head per year.

Wines of Argentina marketing manager Bernardo Hoffmann told decanter.com Brazilian producers see quality Argentinian wines as a threat to their businesses.

‘We believe that, within the free-market context of the Mercosur agreement, their proposals have little chance of going ahead. In the meantime, we at Wines of Argentina continue to work to maintain our growth within the Brazilian market..’

Argentina was forced to redefine its domestic wine industry when its own citizens started drinking less wine a decade ago. Argentinian producers — who make more wine than the Chileans but export only 15% — had no choice but to concentrate on improving their export market.

Helped by the emergence of Malbec as a signature grape, and the Argentinian peso’s 2001 devaluation, exports are now growing.

Both countries have agreed on a one month time limit to reach an agreement.

Written by Jane Anson