Thousands of Argentine wine lovers were holding their collective wine-soaked breath when President Maurico Mauri proposed taxing wine. The home of the “fruit forward” Malbec has never taxed its wine for consumers.
When Mauri proposed a 10 percent tax it sounded like a large tray of wine glasses had shattered across the wine growing regions of the country. Thanks to Malbec the country is ranked sixth in wine production worldwide. The Argentine Malbec has always been considered a solid, cost-friendly alternative to French Reds.
A large majority of Malbec produced is consumed in the country and a 10 percent take would surely reduce domestic consumption thereby impacting the ability to sell Malbec internationally at cost-friendly prices.
Argentine has the largest Malbec acreage in the world. The Malbec grapes arrived to Argentina in 1852 from France. According to Wines of Argentina, a trade organization, the country is the “main producer of Malbec in the world, with 97.574,91 acres of vineyards planted across the country, followed by France, Italy, Spain, South Africa, New Zealand and the USA.”
Wine producers mostly located in the Mendoza region urged Macri to reconsider the proposed tax. After much consideration Macri just announced he was tossing out the proposed tax like an old cork.
According to the Wine of Argentina, Malbec exports to the U.S. since 2005 quintupled, to nearly 3.15 million cases in 2009. In 2011, 6.1 million cases of Argentine wine was shipped for U.S. consumers to enjoy which was a peak year. Currently, Argentine wine exports to the U.S. have declined slightly.
The wine tax was under consideration as part of fiscal reform, and as an offset to proposed cuts to Argentina’s corporate income taxes.
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