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Beginning to make waves in the wine world. (Uruguay)(Industry Overview)

     Author/s: Larry Luxner
     Issue: Sept, 1998

     When a connoisseur mentions South American wine, consumers think of Argentina, Chile or Brazil - rarely Uruguay.  Fernando Deicas, president of Establecimiento Juanico, would like to change that.

     His company recently signed a joint venture with French distributors William Pitters and announced it would invest $1 million to buy land to boost production of a little-known variety called Tannat Merlot.

     Introduced to South America's smallest Spanish-speaking nation in 1870 by Don Pascual Harriague, the variety adapted beautifully to Uruguay's local climate. Today, Uruguayan production of Tannat Merlot has surpassed that of its counterpart in France.

     "Tannat lets us offer something distinct to the world, a wine with its own personality," says Deicas. "It's very important in an age where people are tired of the same varieties and the same tastes."

     Establecimiento Juanico was one of several Uruguayan wineries participating in a mid-May trade show in Miami. The three-day event, entitled "Why Uruguay?" was aimed at luring U.S. investment to South America's smallest Spanish-speaking nation.

     "Uruguay started emerging strongly into the world wine market in the 1990s," says INAVI, a Montevideo-based wine cultivation institute established in 1987. "The introduction of new vine strains in the 1980s, in addition to more open markets, has led to the production of top-quality fine wines and enabled the development of an incipient flow of exports to destinations that have traditionally been considered connoisseur markets."

     In the last 15 years, Uruguay has seen its exports jump, from 60,000 bottles in 1982 to over a million bottles in 1997. In value terms, exports are now worth over $2 million - still a drop in the bucket compared to neighboring Argentina or Brazil, but a significant amount for a country of only 3.2 million people.

     Major markets for Uruguayan wine are now the United Kingdom, Belgium, France and Holland. Says INAVI: "The undeniable success of this transformation is made manifest by the numerous awards obtained in international winetasting events."

     Juanico is one of eight wineries in Uruguay that export (though over 500 smaller ones produce strictly for the internal market). Yet the company accounts for nearly half of the country's wine exports. Last year, it shipped 480,000 liters overseas - 45% of the 1.065 million liters exported.

     Still, the Uruguay market is sizable, at 95 million liters. Although per capita consumption has been declining, the average uruguayo still drinks 35 liters a year - not as high as Argentina, but higher than either Brazil or Chile.

     Over half of Uruguayan wine production comes from the department of Canelones - just north of Montevideo - where Juanico has its winery.

     "Juanico is the biggest exporter," says Deicas, who began distributing local wines by bicycle at the age of 12 in Montevideo's Carrasco neighborhood. "We have competitively priced wine and more expensive ones, ranging from third-party labels like Marks & Spencer, which sell for $1.50 a bottle FOB, to Preludio, which costs $20 a bottle."