Chile: Wine Economics 101
As it happens, this is one of my favorite classes of wines, and I believe it is the most important for consumers. The big expensive "age and wax poetic" wines get plenty of press but are not really what most people drink every day.
I have had a few age worthy wines, but even these fall much more into the 5 to 10 year range than the 20+ style of tannic, huge fruit and acidity types. It also means I haven't run across the "so hard they will never age" genre that too many producers in other parts of the world make.
The talk among the winemakers here is that the hard tannins of the 20+ wines are very difficult, if not impossible to achieve in Chile. They blame the ubiquitous heat. Certainly heat here is a huge problem that they are just starting to address.
Newer planting is being concentrated on microclimates that are a degree or two cooler than the existing vineyards, but the really cool regions are still being mostly ignored.
The coast (of which Chile has an abundance) and the Andes mountain slopes both seem to be obvious areas to explore. Logistics are problematic in that these regions are far from the existing winery facilities. Trucking grapes means cooling and expense, or reduced quality.
High heat also translates to high alcohol. I have heard rumors of experiments with reverse osmosis to reduce alcohol without affecting quality. There has been some promising examples of this is the similarly heat plagued vineyards of Napa, California. From what I have seen this is still something that is being talked about rather than actually practiced here in Chile.
One look at the local grocery store shelves points out the economic realities of the industry. $2 bottles of wine are not uncommon, and the more expensive labels tend to top out around $10. Expectation for the local industry here is much the same as in the rest of the world, well priced, simple wines are what Chile produces.
The higher priced, more complex and dare I say "better" wines are primarily destined for export. The very wines I came to Chile to find are actually more common in the US and Europe than they are at their birthplace.
This has led to a near schizophrenic attitude in Chile. They want to make better wines, but they know they have to export them to get the prices they need, and exporting leads to lower margins. And so, most wineries make a great deal of lower priced wines that help to defray the cost of making and exporting their best efforts.
This in turn perpetuates the market for lower priced wines in Chile. Since the local market doesn't get to experience what a few dollars (or in some cases double or more the dollars) will buy, they don't clamor for it. The classic chicken and egg.
This is really evident in the dessert wines. The market will not bear the necessary expense of sweet wines. Since they by definition are expensive to make, they tend to sell for a premium, everywhere but here. Most of the examples I have seen are priced in the $10 a bottle range, and too often that is all they are worth.
I am not expecting Chile to become a powerhouse producer of dessert wines, it is not their future. What is in the cards is greater quality for export, and a slowly growing appreciation for the higher priced wines in their own country of origin. In a nutshell, Chile is good, and getting better!

