The Argentinian wine industry has welcomed a 50% cut in wine export duty.
President Cristina Fernández de Kirchner has announced the government will halve export tax from 5 to 2.5% and has promised a grant of 1.2 million pesos (£240m) to promote Argentinian wine abroad.
‘Until now the wine industry hasn’t been a focus for the Argentinean government so this is a good sign,’ said James Forbes, UK head of Wines of Argentina.
‘It’s good to have the extra promotional money but spread across 50 global markets it won’t change the fortunes of the Argentinian wine industry,’ he added
There is still some uncertainty surrounding the announcement. Argentina’s government currently provides a 5% subsidy for exporters, effectively reimbursing the export tax charge. It is not yet clear whether Kirchner will adjust the subsidy in line with the 2.5% tax cut.
In any case, the cut will help producers’ cash flow in current economic times. If the subsidy does remain at 5%, this will be a 2.5% financial boost for exporters.
Jeff Mausbach of Catena Zapata said, ‘It’s a positive and welcome step from the government but not the make of break of the Argentinian wine industry in 2009.’
Written by Rebecca Gibb