While international trade has suffered a serious setback due to the new crown epidemic, the Argentine government believes that the growing ties between countries in health emergencies have also provided new avenues for trade.
Image courtesy of: Wine News
Therefore, the Argentine Ministry of Foreign Affairs, the Argentine Wine Company (Coviar) and Aerolíneas Argentinas have signed a tripartite agreement to use flights from Shanghai to Argentina for medical supplies to ship wine to China at a reduced price. It is reported that the agreement will last three years and that the Argentine side plans to use these flights to expand trade exchanges with China.
Dilemmas and opportunities for Argentine wines
Argentina"s El País newspaper reported that its wine exports have averaged $811.9 million annually for the last three years, according to data from the Foreign Trade Department of the Argentine Foreign Ministry. Starting in 2013, wine exports have been on a downward trend, except for 2016 and 2018, when they improved. The main destinations for Argentine wine exports are the United States (31% of the total), the United Kingdom (13%), Canada (8%), Brazil (7%) and the Netherlands (3%), while the Asian market, especially China, will be a market with great potential.
Pablo Sivori, deputy director of the Trade and Investment Promotion Department under the Ministry of Foreign Affairs, said: "We are using wine as a promotional priority because it generates more than $800 million a year for Argentina and is also a symbolic product for the country. It is also relatively little known in China compared to Europe and the United States. He believes that the changing eating habits of Asian countries and the consolidation of enjoyment-oriented consumption in these countries present an opportunity to expand sales of Argentine wines. At the same time, the Argentine government is developing similar protocols for the transportation of blueberries.
The new channel brings new possibilities
With the epidemic easing in China and renewed consumer demand, this delivery of cargo via medical supply flights has given Argentina the ability to deliver goods quickly. On the other hand, it has likewise helped Argentine airlines cut costs. In fact, it was not only cargo that was transported, but in one particular flight, Argentine Airlines also managed to bring a group of Chinese citizens back to China.
Sivori said he has had discussions with different departments to make better use of existing air transport methods, but given that these are passenger planes that transport medical supplies, there are limitations in moving large quantities of commodities.
The measure also responds to the question of how airlines will transform themselves after the epidemic. In fact, many companies in the commercial airline sector are studying how to transform themselves as fewer people are willing to travel and aircraft capacity is idle. In the framework of this policy, Aerolíneas Argentinas also announced, in early May, the creation of a new cargo transport division. The amount of cargo transported on these flights will depend on the final outcome of the negotiations between the parties, as well as the number of special flights scheduled.
During a flight organized by the airline, the staff adjusted some of the seats, and after emptying some of the passenger cabins, each flight could transport cargo with a total weight of less than 28 tons and a total volume of less than 170 cubic meters per flight.
In addition to exclusive air transportation, the agreement provides for other measures such as the promotion of content related to Argentine wines on flights and other advertisements of the airline (such as Air Arabia's audiovisual channels, airport public spaces, etc.), as well as reduced baggage fees on flights departing from wine provinces if passengers are carrying less than six bottles of wine. Also under the agreement, special wine tours and discounts for passengers on wine purchases will be offered.
Argentine wine merchants expand China market through multiple channels
In fact, despite the global health crisis caused by the New Coronavirus and the delicate situation of the Argentine economy, Argentine wines are still favored by consumers from all countries.
In the case of Don Cristobal Winery, Cristobal Lapania, the company's director, said: "In the first six months of 2020, we exported 140,000 bottles (equivalent to 11 containers) of wine to China, which is three times our historical sales and has helped the company to overcome the impact of the epidemic to some extent, and we hope to continue to expand sales by the end of this year, selling another 200,000 bottles. We hope to continue to expand sales and sell another 200,000 bottles by the end of this year.
Don Cristobal not only uses e-commerce platforms to promote and sell, but the company will also participate in the 3rd China International Import Expo (CIIE) in Shanghai in November 2020.
He said: Since our first export to China in 2009, our company has visited China more than 30 times, visiting more than 40 cities including Shanghai and Shenzhen, and even Luzhou, which is famous for its traditional Chinese liquor. In addition to that, we have participated in more than 20 well-known exhibitions, such as Interwine, Vinexpo Hong Kong, Prowein China, China International Import Expo, etc. And we also have wine tour and business negotiation activities with Argentine wine companies.
In the face of the current situation, despite the enormous effort required, we are more convinced than ever of the need to strengthen ties with our customers, to continue developing export trade and to keep exporting Argentine products to the world," said La Pania.