CHILE: Wineries facing weaker results
The weaker US dollar, a rise in low-value wine exports and a lower grape harvest this year are all likely to impact on the finances of Chilean wineries.
Last year the US dollar reached record levels of around CLP730 pesos, whereas this year it has fallen to around CLP630 pesos, reducing the value of dollar-denominated wine exports. The industry is also facing higher costs for its principal raw material, with this year's harvest likely to total between 550m and 580m litres, compared with around 600m last year.
Chile has also increased its lower-value bulk wine exports, hurting company profitability and potentially weakening recent efforts to position Chile as a top quality producer nation, some industry sources fear.
The Chilean wine industry generated around US$1 billion last year, with exports accounting for $660m.
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