Packaging Costs Now Outweigh Wine Value in Argentina, Industry Warns

The cost of producing and marketing a bottle of Argentine wine has reached a point where the packaging elements are more expensive than the wine contained within. This stark reality, once difficult to imagine, highlights a significant transformation within the country's viticultural sector.

Claudio Giusti, vice president of the San Carlos Sud Viticultural Cooperative, described the situation as "sad to say," noting that the bottle, cork, labels, and overall packaging now command a higher price than the wine. Data from the Argentine Wine Corporation (Coviar) supports this, showing that for a standard wine bottle, the wine itself constitutes only about 40.63% of the total cost. The remaining expenses are distributed among the bottle (23.44%), labels (9.38%), cork (4.50%), capsule (3.44%), and other associated costs.

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Today, everything that dresses a bottle costs more than the product inside. The bottle, the cork, the label, and all the packaging cost more than the wine they contain. It is very difficult and even sad to say.

When the final consumer price is considered, the wine's share diminishes even further. Marcelo Federici, vice president of Coninagro, explained that while exact figures vary based on packaging type, winery scale, and market distance, the trend is industry-wide. For instance, a one-liter Tetra Pak wine, priced between $1900 and $2100 for the consumer, contains wine valued at only $350-$400 for the producer, representing just 20-25% of the final cost.

Federici also pointed out that taxes at national, provincial, and municipal levels add to the cost at each stage of the supply chain. This complex web of expenses means that the final price consumers pay is heavily influenced by non-wine related components, posing a significant challenge for producers aiming to make their products competitive.

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If we take a consumer price close to $2000 for a liter of red wine in a Tetra Pak and subtract the VAT, approximately $1650 remains. Of that amount, the wine has a value for the producer of between $350 and $400 per liter. That is to say, the wine represents only between 20% and 25% of the final value.