7.3.5 Wine Commercialization, the Distribution Channel The manner in which fine wines are sold differs from the way in which table wines are put on the market. Although both types of wines can be sold either directly to retailers or through a distributor or broker, differences in the target consumer markets imply different sales and marketing approaches. While the former have to suit the general tastes of each particular market, the latter can be exported to practically any country. Retailers purchasing fine wine directly from wineries have to ensure that each particular wine will be appealing to a segment of consumers. In contrast, price is the most important issue for retailers buying table wine. A common practice in the table wine market is for distributors to purchase generic (unlabeled) bottles of table wine and apply their own labels. Whereas country of origin is not important for table wines, bottles of fine wine have to specify not only the winery and country of origin, but often also the region where the wine is produced. 7.3.6 History of the Argentine wine industry Historically, Argentina was one of the largest per capita consumers of wine in the world. In the 1940s, however, the production of fine wines made in the old-world style began to be replaced by the production of less-expensive wines made with the same techniques. This shift was driven by the growth in internal consumption for such wines. In essence, the industry remained focused on producing these types of wines for the internal market until the 1980s, when some firms began experimenting with new techniques. Until that time, few winemakers had ever traveled abroad and apparently little was known about how other world producers had been changing the way in which they were making their wines. The relative lack of imported wines further limited the ability of local producers to think beyond the ways in which they had been producing their wines. The experiments of the 1980s initiated a shift from quantity back to quality, but with the application of new techniques. Although the consumption of table wines began to decline in the 1980s, economic conditions and policies designed to support this declining industry made it difficult for producers to adapt to this change. The economic policies of the 1980s produced not only hyperinflation and negative growth, but also price controls and output quotas, which actually led to the destruction of some highly valued grape stocks. At the same time, hundreds of wineries and thousands of small grape producers were being artificially sustained by state-owned
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