Chris Shanahan: Argentina vignerons target the world

Argentina’s wine export graphs sweep ever upwards, like the slopes of the Andes that bound the country’s vineyards. In recent years this once domestic-focused industry set about exporting in earnest and now competes with Australia in the world’s major markets.

Figures provided by the Argentina embassy show exports of malbec, the country’s leading red variety, grew about tenfold between 2002 and 2010 – from 850 thousand nine-litre cases to 8.6 million cases. Exports of the signature white, torrentes, grew from 140 thousand cases to 664 thousand cases in the same period.

While the on-ship price of malbec peaked at $US35.52 a case in 2008 (after rising from $US27.28 in 2002), volumes barrelled on during the GFC mark 1 – rising from 4.2 million cases in 2007 to 8.6 million in 2010. The price fell back to $US34.80 a case in 2009, then recovered most of its lost ground to $US35.44 in 2010.

The price of torrentes, however, remained on its Andes-foothills-like trajectory without interruption, rising from $US16.86 a case in 2002 to $US27.86 in 2010.

There’s an upward trend, too, if we track Argentina’s vineyards a couple of thousand kilometres northwards – from Patagonia, at about 41 degrees south, to Salta, around 24 degrees south of the equator. As we move north, the temperature warms up. Wine grapes don’t like this, as they give their best flavours when ripening in mild to cool conditions. So, to compensate, vignerons plant their vineyards at ever-higher altitudes.

Argentina’s lowest vineyards, in the upper Rio Negro Valley, Patagonia, sit at around 200 metres above sea level. But at Molinos, Salta, not far short of the Bolivian border, vineyards can be found at up to 3,000 metres. The average altitude of vineyards, claim the Argentineans, is 900 metres above seal level.

Giving that an Australian perspective, Canberra’s Lark Hill Vineyard reaches 860 metres at its highest point, and vineyards in Orange can be as high as 1,100 metres (although most are lower). According to Wine Australia website our highest vineyard, at 1,320 metres, is at Guyra, New South Wales (latitude 30 degrees south).

Mendoza, Argentina’s largest wine-producing area – just below the mid-point of the north-south vineyard spread – produces 80 per cent of the country’s wine. Its 160 thousand hectares of vines, planted between 457 and 1,780 metres, are about the same as Australia’s total plantings.

With an annual rainfall of a desert-like 200mm a year, Mendoza relies on rivers flowing out of the Andes for irrigation. And because the dry climate all but rules out fungal disease, the area’s vignerons enjoy a significant competitive advantage over producers from other countries.

This is because vineyard-management costs can blow out during extended periods of mild, wet weather. Just ask any Canberra vigneron about the endless hours spent spraying against mildew and botrytis (and the additional vineyard labour costs) in the lead up to last vintage.

But Mendoza’s 200mm rainfall seems generous compared to La Rioja’s 130mm. Indeed, of Argentina’s major winemaking regions, Catamarca (to the north) alone receives significantly more rainfall – and then a mere 432mm, well below Adelaide’s 549mm, Canberra’s 629mm or the lower Hunter Valley’s 900mm.

Because of the arid climate, the Argentineans refer to the wine regions as oases, and list five for the Mendoza region – Northern Mendoza, Eastern Mendoza, Mendoza River, Uco Valley and Southern Mendoza.

Abundant water, cheap land and low disease pressures have been key factors attracting foreign investors into Argentina, and especially Mendoza, over the last 20 years.

In a piece published on www.glug.com.au, geologist-turned-wine merchant, David Farmer, notes a report in Britain’s Daily Mail, 17 July 2011, on the sale of Estancia Punta del Agua – a 405-thousand-hectare estate in San Juan province, 165 kilometres north of Mendoza. Farmer reports that much of well-watered land appears suited to grape growing. And it’s selling for less than $25 a hectare.

On a visit to Mendoza in 2004, Farmer had noted, “The great bulk of wines are made from grapes off flat lying vineyards. And the soils are very fertile being the product of glaciation, which grinds rock to a flour-like texture. Mendoza is like an elevated version of our wine region, Griffith. The potential viticultural land stretches hundreds of kilometres north and south. Provided there is enough water, you could grow the world’s entire wine supply right here.” (The full report provides unique insights into Argentina’s wine landscape).

Big, juicy, silky malbec remains Argentina’s number one export variety at 8.6 million cases in 2010. Behind malbec comes cabernet at 2.3 million cases, then generic red (probably bonarda) at 1.9 million case, chardonnay at 1.5million case and the local white, torrentes, on 664 thousand cases.

As we saw in a recent tasting, Australian importers are focusing on malbec, bonarda and torrentes. We’ll review some these in coming months.