Having seen Chile blaze a trail in export markets, Argentina is now asserting itself in the international wine market. Moreover, writes Chris Losh, while Argentina boasts many of the same positive attributes that have benefited Chile, such as a fantastic climate and plenty of investment, it has the scale to exceed even Chile's formidable performance.

At a time when many wine-producing countries are eyeing the future with some concern, whether burdened by over-production or worried by waning demand, two countries are carrying all before them.

Apart from the Andes, an enviable climate and a shared language, Chile and Argentina have little in common, yet there is no question that the wine industries in both countries are on a roll, recording double-digit growth figures around the world. Chile's exports have doubled since the millennium, while Argentina's have risen fourfold. Moreover, both look set fair to continue on that growth curve for a while.

Of the two, however, Argentina is the big story, for two reasons. In the first place, while Chile's export-driven strategy is well established, Argentina's is relatively recent; this is a country that is just getting on its surfboard at the start of the wave, not halfway to shore.

Secondly, in terms of scale, Argentina's potential is nothing short of breathtaking. Having always had a large and thirsty domestic market, Argentina was not until recently particularly interested in selling abroad. Currently, the country exports around 200m litres of wine a year, about a quarter of which is in bulk. Yet this is only 12% of the total production. By contrast, Chile's exports of 60m litres represent three-quarters of all the wine it produces.

Argentina, in other words, has both momentum and critical mass. It is a powerful combination, and one which surprises foreigners, many of whom misread the country's timid performance in export markets as being due to a lack of scale rather than the result of a home-focused strategy.

"We don't have an export philosophy, like Chile, and we weren't born with an export mentality like Australia," admits Andres Belinsky, export manager at Moet-Hennessy-owned Terrazas.

But all that has changed. Domestic consumption has tumbled from 70 litres per capita to 30, creating a need to find new markets. Ten years ago, these attempts met with a somewhat lukewarm response as wineries largely tried to bring traditional Argentine wines - over-oaked, over-oxidised and low on fruit - to the table.

Since the millennium, however, the country has been going through the kind of cathartic modernisation enjoyed by the rest of the world. Indeed, the timing could hardly be better, with a growing number of varietally-savvy consumers, particularly in northern Europe, the US and the UK, looking for grapes that are a bit different yet still accessible.

So in other words, this is a good time to be bringing Malbec to the table. And Argentina has a lot of Malbec - some 30,000 hectares in fact, which is flying off shelves pretty much all over the world. According to the generic body, Wines of Argentina, sales of the grape over the last year were up 28% in mainland Europe, 50% in the US and 73% in the UK.

With its bright fruit, soft structure and attractive colour, it is Argentina's trump card, and deservedly the country's most-planted grape. It is, moreover, one that is ideally suited to hitting the hot-spot growth areas of US$10-15 or GBP5-10.

No wonder, perhaps, that the last decade has seen something of a flood of foreign investors into the country, both from across the Andes, such as Concha y Toro, Claro Group and Montes, and from across the Atlantic, with Lurton, Michel Rolland and Cheval Blanc among the European names to have invested in Argentina. No surprise, either, that land prices in key vineyard areas have rocketed. For instance, the cost of land in Altamira has risen from US$1,000/ha to $40,000/ha.

What we have not seen yet, though, are the big-money winery buyouts that have defined the economic landscape in California and Australia. Perhaps because investors are, as in South Africa, nervous of the economy, and perhaps because the country has no brands that are sufficiently global to be of interest to the big corporations. Argento, for instance, the biggest Argentine brand in the UK, sells only 150,000 cases.

Argentina's lack of a big-hitter is something that has held it back, though there are signs of movement. Gallo has set up a joint venture with Catena, while Constellation has teamed up with Vistalba and O Fournier.

"These are ambitious projects and they will surely benefit the whole Argentine category as they are going to make the country's wines better known in the US," says Jose Ortega of O Fournier.

So is the future East of the Andes one of untrammelled joy? Not necessarily. Pegging the currency to the dollar looked a lot smarter eight years ago than it does now, with most of the benefits of 2001's currency devaluation now wiped out by a feeble exchange rate. Fournier's Ortega wryly makes the point that his wines are getting cheaper every year on export markets.

Purists might also raise an eyebrow at the red-heavy make-up of the vineyards. White grapes are less than a quarter of the vineyard area, and falling, and even the biggest white varietal, Chardonnay, accounts for no more than 12% of any export market. Some in Argentina have talked up the potential of the Torrontes variety, described by some as Gewurztraminer-Lite, but beyond its sheer uniqueness it is hard to see any logical reason for it having a major impact abroad.

There are, of course, some high-quality whites at all price points, but the country does not have "the Casablanca factor" that its Andean neighbour enjoys, namely one region associated with quality whites, which newcomers can understand.

These, though, are minor quibbles. There is sufficient experimentation going on in Argentina to suggest new, cool-climate vineyard sites are bound to emerge over the next five years, just as they have in Chile. And the economy, while not perfect, looks a lot more stable than it has at any time in the recent past.

Argentina, we can say with a certain amount of confidence, has its surfboard waxed, its wetsuit on, and is about to ride a giant export wave that will be felt around the world.