Wine to Brazil

(Last updated: 06 May 2008)

Trends and opportunities

The market

Partly as a reflection of the very strong international commodity price boom in 2007,  Brazil, as a major commodity exporter of iron ore, soybeans, sugar, and pulp and cellulose, has benefited with a strong valuation of its currency, the Real (R$) by around  35 per cent in the last 18 months. This has led to an increase in imports of many capital and consumer goods, including wines.

In 2007 Australian wine imports grew by 49.42 per cent in dollar value compared to 2006, whereas the average growth of wine imports from all origins grew by 32.42 per cent, thus showing that Australian wines have a strong potential to win a larger market share in Brazil, currently representing a low one per cent of total wine imports in dollar value. (Source: Brazilian Ministry of Development, Industry and Trade).

There is still a low consumption of wines in per capita terms (two litres per year), especially if compared with the consumption of beer (52 litres per year). This is due mainly to the price factor. For example, a Chilean average wine is 10 times more expensive than a 375ml bottle of beer.

Brazil is a key player in beer production and is currently the fifth largest producer of beer worldwide, after China, USA, Russia and Germany.

Brazilian wines, with a few exceptions, have not achieved a consistent quality standard so consumers generally prefer to buy wines at the same price level from Argentina or Uruguay that can be quite price and quality competitive in Brazil due to the Free Trade Agreement (Brazil-Argentina-Uruguay and Paraguay have a FTA).

Imported wines from other regions (European Union, USA and Oceania) are more heavily  taxed, thus making it difficult to reach a greater number of consumers. 

In 2007, total wine imports in Brazil reached US$156 million. Chile has the largest market share of 30.5 per cent, followed by Argentina with a 23 per cent market share, thus these  two countries alone represent 53 per cent of the market. 

There are currently some 15 importers of Australian wines, representing some 30 wineries. The perception of a wine that is good value for money is critical for Australian wines to win a greater market share in Brazil. 

Competitive environment

The five largest exporters of wine to Brazil are Chile, Argentina, Portugal, Italy and France, representing 91 per cent of the market.

Tariffs, regulations and customs

Imported wines are taxed an import duty of 27 per cent on the CIF price and on top of that there are other taxes and duties. Wine importers from the non-FTA countries pay a total of approximately 80 per cent of taxes and duties on the CIF price.

On the regulatory side, new wineries that haven’t exported to Brazil before have to be registered at the Ministry of Agriculture and Supply prior to being allowed to export to Brazil. This is a time-consuming exercise and is usually coordinated by the importer who  is interested in importing from that particular winery.

The requirements include:

• The presentation of certificates of analysis issued by accredited laboratories for all the wines that are intended to be exported to Brazil.
• A letter indicating the name of the organisation in Brazil that will be distributing the wines in Brazil.
• A letter in official letterhead from a third party organisation (can be from the Australian Consulate/Austrade, the Wine and Brandy Corporation or a Business Chamber or entity from the region where the winery is located) acknowledging the existence of the winery.
• After the process is reviewed by a Ministry officer the winery will have a registration number allowing it to export to Brazil.

Another non-trade barrier is the requirement that all shipments have to be accompanied by original certificates of analysis for all the wines – photocopies are not allowed. The non compliance of this requirement has caused some importers to have their wines held up at the port for more than a week until the original certificates were couriered to Brazil.